Dena Bank chairman P.L. Gairola in Mumbai on Monday. (Fotocorp)

Mumbai, July 24: Dena Bank is planning to raise close to Rs 425 crore through innovative perpetual (tier I) and upper tier II debt instruments. This is in addition to Rs 250 crore, which it will raise through subordinated bonds.

The board has approved raising these funds from domestic or international markets to improve its capital adequacy ratio (CRR), the bank has informed the bourses. Close to Rs 125 crore will be raised via innovative perpetual debt instruments and Rs 300 crore will come from upper tier II debt instruments, the bank added.

Dena Bank has not yet decided on the issue dates. The capital adequacy ratio of the bank now stands at 10.46 per cent.

On July 21, the Reserve Bank of India made some key changes in its guidelines for raising funds through such hybrid instruments. It permitted banks to raise up to 49 per cent of their borrowings through innovative perpetual debt instruments in foreign currency. Banks can raise these funds in foreign currency without the Reserve Bank’s approval.

Meanwhile, Dena Bank has posted a net profit of Rs 18.49 crore for the quarter ended June 30 compared with a net loss of Rs 189.30 crore during the corresponding previous quarter, chairman and managing director P.L. Gairola said. Net profit for the quarter ended March 31, 2006 was Rs 130.47 crore.

The total income of the bank went up by 5.66 per cent to Rs 546.87 crore from Rs 517.58 crore in the first quarter last year.

The bank’s operating profit declined marginally to Rs 117.18 crore from Rs 124.07 crore in the quarter ended June 30, 2005 mainly due to lower treasury earnings. For the quarter ended March 31, 2006, the operating profit was Rs 175.27 crore.