Dena Bank to raise at least 5 bln rupees in FY09

MUMBAI (Reuters) - State-run lender Dena Bank plans to raise at least 5 billion rupees through debt in 2008/09, its chairman and managing director, P.L. Gairola, told reporters on Wednesday.

The bank had a headroom to raise around 7 billion rupees based on previous fiscal's balance sheet, he said on the sidelines of a conference to announce the bank's results.

"This year's profits will be ploughed back, so the headroom will be much higher," he said, adding the bank would look at an overall business growth of 23-24 percent in the current fiscal.

On Wednesday, the bank posted a more-than-150 percent rise in January-March net profit to 1.11 billion rupees, mainly on interest income growth and other income as well as write-back of provisions, Gairola said.

The bank had a written back tax provisions worth 1.4 billion rupees during the full year which has been used to make provisions towards non-performing assets, he said.

"We wanted to clean up our balance sheet," he said, adding the bank had to make less aggressive provisions towards bad loans, thereby boosting profits.

The bank would also look at reducing fresh slippages in bad loans, he said.

"We want upgradation and recoveries should be more than the slippages.

It recovered 432.3 million rupees in Jan-March against 370 million rupees in the same period the previous fiscal.

Shares in the bank ended 3.24 percent up at 60.60 rupees in the Mumbai market.