DCB Bank Ltd. Bank Managing Director & CEO Praveen Kutty tells Kshipra Petkar that the lender remains confident of sustaining 18–20% growth in FY27, with asset quality at multi-year best levels and margins gradually improving. He says the bank has not seen any material impact from the West Asia crisis so far and will continue to focus on granular deposit growth and secured retail lending.
What is the growth outlook for FY27?
We remain confident of sustaining around 18–20% growth, despite past and potential headwinds, given our diversified and largely secured book. The focus is on deposit-led growth, improving granularity with more retail deposits, and reducing cost of funds. Deposits are expected to grow in line with or slightly above credit growth. On a go-forth sense, we want to put much more emphasis on getting individual small-ticket customers coming into the bank.
Are you seeing any initial impact of the West Asia crisis?
If crude stays above $100/ barrel, it will impact GDP, inflation and currency through higher logistics and input costs. Some indirect disruptions are already visible, like construction delays due to material shortages. However, there is no material impact on our portfolio so far.
How is asset quality trending?
Asset quality has improved significantly, with gross NPA at a 7-year low of 2.45% and net NPA at 0.89%. Slippages have also declined to 2.28% from 3.09%, supported by strong recoveries. Recovery as a percentage of fresh slippages has improved significantly to 109%, compared with the usual 70–80% range earlier, indicating stronger collection efficiency and balance sheet resilience.
What is the credit cost guidance?
We continue to guide for 45–55 bps, and current levels remain around 40 bps.
What is the NIM outlook?
NIM has improved to 3.39% and is supported by stable yields, lower deposit costs and strong recoveries. We expect gradual improvement going forward, subject to interest rate movements.
Why has other income declined?
Treasury income has largely stopped, and going forward we do not expect meaningful contribution from it. Core fee income, however, has reached record levels, that is what we will be depending upon in a go forward sense also.
What are the capital raising plans?
We have an approval for Rs 2,000 crore and may look at raising capital around end of Q2 or the beginning of Q3, depending on market conditions.