PNB eyes bank in Kazakhstan, to expand UK ops
Sep 09, 2009, Mumbai: Punjab National Bank (PNB) is scouting for an acquisition in Kazakhstan for an estimated $33 million by March next year. This was revealed by a senior executive of the bank.
PNB currently operates a representative office at Almaty in Kazakhstan. If the proposed acquisition goes through, PNB would be the first Indian bank to have a branch presence in Kazakhstan.
Kazakhstan’s financial regulator, Agency of the Republic of Kazakhstan, recently revised the minimum capital requirements for banks operating in the country. As per the new norms, local banks would have to adhere to a minimum capital requirement worth $37 million from October.
The PNB executive said, “The latest norms announced on minimum capital requirements in Kazakhstan could lead to the closure of many small banks in the country. These banks are potential takeover targets by players like us. We have identified one of them for a buyout and have already initiated dialogue with its board members.”
Currently, about 37 small banks operate in Kazakhstan, In May, 14 banks in the country had capital less than $33 million. In June, five Kazakh banks were classified as “under liquidation”.
Besides expanding in Kazakhstan, PNB has also earmarked $12 million to float a subsidiary in Canada in the current fiscal. Also, the bank is eyeing an acquisition in Indonesia and is expected to invest $8 million to open a branch in Norway by March-end next year.
PNB has unveiled massive expansion plans in the UK too. RS Sharma, managing director of PNB subsidiary, PNB UK Ltd, said, “Our deposit base grew at around 25% to $180 million and the number of deposit accounts rose around 40% to 8,000 in the past three months in the UK. In a bid to reduce our dependence on inter-bank borrowings, we expect to open two-three new branches in the UK by March 2010.”
PNB is the only Indian bank that currently offers online deposit products in the UK.
PNB’s reserves, excluding revaluation reserves, stood at Rs 13,731 crore as on March 3 . The bank is currently present in eight overseas locations.