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PNB may sell s take in housing finance unit

Punjab National Bank is proposing to sell up to 10% in its housing finance company. According to the bank’s MD and CEO Sunil Mehta, the bank now holds 38.8% in PNB Housing Finance, which has a market capitalization of nearly Rs25,000 crore. PNB Housing Finance is considered the most valuable investment ever made by the public sector bank. It reported a 93% jump in net profit to Rs184.80 crore during the June quarter of the current fiscal year. Meanwhile there are reports that the bank is also planning to sell some part of its stake in PNB Gilts. The bank may be selling the stakes as part of its plans to have higher capital adequacy. Mehta said the bank plans to raise Rs1000 crore by selling the stake in PNB Housing Finance before the end of the fiscal year. This is part of the Rs3,000 crore capital the bank plans to raise this fiscal. The bank’s capital adequacy ratio at the end of June quarter was 11.64%, above the Basel III requirement of 11.5% by March 2019. Mehta also said the bank has received in-principle approval to launch an IPO for its life insurance subsidiary PNB MetLife.

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