State-owned Punjab & Sind Bank would take a call on raising equity capital through qualified institutional placement (QIP) after taking into account third quarter numbers and pace of loan growth, the bank’s managing director Swarup Kumar Saha said.

As far as capital adequacy is concerned, the bank is well-capitalised at 15.68 per cent and it can easily take care of business growth this year, he told PTI in an interaction.

 However, he said, “There is a need to build some buffer on the equity side. So, we would plan a small amount of capital mobilisation either through equity or bonds, say `250 crore or `300 crore.

 “We will watch our third quarter performance and momentum of credit demand and based on that make a decision with regard to QIP or other means.”

 The bank has redeemed Additional Tier 1 (AT1) bonds, he said, adding, now the bank would try other means including QIP, which is cost effective.

 The government of India’s holding in the bank stood at 98.25 per cent at the end of September 2022. If the bank raises capital through share sale, the holding of the government would decline depending on the quantum.

 During the previous two years (2020-21 and 2021-22), the government infused `5,500 crore and `4,600 crore through non-interest bearing recap bonds.

 With the infusion of `4,600 crore, the government holding in the bank increased to 98.25 per cent as on March 31, 2022.

 On loan growth, Saha said, the bank aims at a 15 per cent rise during FY23 and the current capital base can easily support this.

 The Delhi-based lender had shifted its focus to the retail, agriculture and MSME (RAM) segment to de-risk its balance sheet. Corporate segment lending grew by a muted 2.5 per cent in Q2FY23, while retail lending improved by 16 per cent on an annual basis.

 Last week, the smallest public sector bank reported a 27 per cent jump in profit to `278 crore in the second quarter of FY23 on the back of reduction in bad loans.