The bank had a one-off interest income of Rs 30.43 crore and a corresponding tax expense of Rs 8.59 crore in the quarter, which pertains to tax refunds of earlier years.
"We have made a good beginning. Increase in the branch network is putting some pressure on the cost to income ratio,"DCB Bank's Managing Director and Chief Executive Murali M Natrajan said.
Its net interest margin stood at 3.71 per cent as against 3.44 per cent last year, he said.
Natrajan said that the bank replaced its high-cost borrowing with retail term deposits during the quarter which helped improve its net interest margins.
The bank's asset quality deteriorated slightly during the quarter due to the stress in its small and medium enterprises (SME) portfolio, Natrajan told PTI.
Gross NPAs rose to 1.78 per cent from 1.69 per cent in the March quarter, while net NPAs rose to 0.97 per cent from 0.91 per cent in March.
"NPAs have remained under control. However, a few SME and mid-corporate accounts continue to have payment delays," he said.
During the quarter, slippage stood at Rs 24 crore, mainly in the SME segment. Its coverage ratio as of June was 79.07 per cent in the previous quarter. The bank made an additional provision for specific standard advances of Rs 10.33 crore.
The bank's balancesheet grew at 17 per cent to Rs 12,884 crore from Rs 10,993 crore last year. Its deposits grew by 27 per cent to Rs 10,552 crore, while its net advances grew by 28 per cent and stood at Rs 8,291 crore.