Dena Bank is planning to raise Rs 250 crore (Rs 2.50 billion) in the next three months via a mixture of subordinate bonds and second public issue to fund its expansion programmes and increase the capital adequacy ratio, its chairman A K Khandelwal said.

While the subordinate bonds of Rs 150 crore (Rs 1.50 billion) with a coupon rate of about 6 per cent would be floated during this month, the second public issue is being planned for June, he said.

"We will float a Rs 80 crore (Rs 800 million) issue with a premium once the profit figures for 2003-04 are out," Khandelwal said, adding that the size of the issue will be of more than Rs 100 crore (Rs 1 billion) and premium rates would be decided at the time of the issue depending on market conditions.

The chairman said the proceeds from the bonds issue will help improve the bank's CAR by March 31, 2004.

To a query, Khandelwal said the high non-performing assets were one of the Bank's major concerns. "We are saddled with a gross NPA of Rs 1,600 crore (Rs 16 billion) and net NPA of Rs 950 crore (Rs 9.50 billion) which were 17 per cent and 11 per cent respectively of the advances.

He said the bank had managed to bring down NPAs by Rs 450 crore (Rs 4.50 billion) through cash recovery, write-offs and upgradation of certain accounts during the current fiscal. "We are trying to bring down the gross NPA to below 10 per cent and net NPA to 6 per cent by the end of next fiscal."