CAPITAL INFUSION WILL HELP DENA BANK SUSTAIN GROWTH

The government's recent decision to infuse fresh capital would help Dena Bank grow its credit base, which should help it sustain the current growth momentum in its earnings in the near term. The government recently announced that it will infuse Rs 539 crore of equity capital into Dena Bank. This should help the bank restore its Tier-I capital adequacy ratio to the mandatory 8% from 7.2% in FY10. In FY10, its loan assets grew faster than its equity base, thereby hampering the future growth potential. Its leverage shot up 22 times by March 2010, which necessitated an expansion of the equity base.

SOURCE: http://articles.economictimes.indiatimes.com/2011-03-02/news/28649246_1_capital-infusion-dena-bank-public-sector-banks