Punjab National Bank, the country's second-largest public sector lender, will sell a 26-0per cent stake in its housing finance arm to US-based Dawnay Day for about Rs77 crore.

"Today the board has decided to divest a 26 per cent stake in PNB Housing Finance Ltd," chairman and managing director K C Chakrabarty said, adding, "we have invested Rs7 crore and expects to get 10-11 times from the 26-per cent stake sale.

The US-based Dawnay Day will be PNB's strategic partner in the housing finance arm, he said while speaking to reporters after announcing the results for 2008-09.

The board PNB has approved dilution of up to 49-per cent stake in the housing finance company, he added.

However, he said, any decision to further dilute the stake in PNB Housing Finance Ltd, a wholly-owned subsidiary of the bank, would be taken at the appropriate time. 

PNB,meanwhile, has decided to to set up a joint venture for factoring services with the Malta-based Fin Bank.  The Malta bank would hold 40 per cent stake while PNB and other investors will hold 60 per cent in the joint venture, he said.

PNB Housing Finance Ltd reported a 32-per cent rise in fiscal 2009 net profit at Rs53.41 crore against Rs40.59 crore the previous fiscal.

During the year ended 31 March 2009, PNB Housing Finance reported operating profit of Rs81.37 crore against Rs67.72 crore a year ago.

The company achieved 22 per cent growth in total income at Rs277.21 crore as compared to Rs227.14 crore.

PNB Housing Finance declared 20-per cent dividend for the year.