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DCB Bank net profit up 188% in Q1

At an operational level however, the lender posted a 18% y-o-y fall in its pre-provisioning operating profit to Rs 166 crore on account of fall in non-interest income.

DCB Bank net profit up 188% in Q1
The bank’s other income fell 24% to Rs 92 crore in Q1FY23.

Private sector lender DCB Bank on Saturday reported net profit of Rs 97 crore for the three months ended June 30, higher by 188% year-on-year (y-o-y) due to a significant reduction in its provisions. The bank posted 77% y-o-y decline in its provisions to Rs 35 crore in Q1FY23.

At an operational level however, the lender posted a 18% y-o-y fall in its pre-provisioning operating profit to Rs 166 crore on account of fall in non-interest income. The bank’s other income fell 24% to Rs 92 crore in Q1FY23.

The bank’s net interest income improved 21% y-o-y to Rs374 crore led by strong loan growth. Net interest margin (NIM) as of June 30 stood at 3.61% as of June 30 as against 3.31% in the previous year. The lender is targeting NIM of 3.65-3.75% through improving current accounts, savings accounts (CASA), diversified loan portfolio, and improving asset quality.

The bank’s gross non-performing asset (NPA) ratio as on June 30 stood at 4.21%, lower by 71 bps y-o-y and 11 bps on sequential basis. Net NPA was at 1.82% as on June 30, 2022, down by 102 bps y-o-y and 15 bps sequentially. Provision Coverage Ratio (PCR) was at 69.48% as on June 30.

“Monthly NPA slippages, excluding gold loans, are steadily moving towards pre Covid-19 levels. Recoveries and upgrades continue to be strong. Investments in frontline and branches are expected to increase the growth trajectory in the coming months,” Murali Natrajan, managing director and CEO of the bank said.

Advances grew by 18% y-o-y to Rs 29814 crore in Q1FY23. The bank is aiming to double the balance sheet size in three to four years led by mortgages and gold loans. Deposits grew by 15% y-o-y to Rs 35,081 crore. CASA ratio improved to 28.57% as on June 30 as against 21.69% a year ago. Capital Adequacy Ratio was at 18.47% as of June 30, with tier-I at 15.44% and tier-ll at 3.03%.

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