This year has seen the major expansion of the Bank branch network according to thestrategy we had set forth in October 2015. I am happy to report that this has beensuccessfully executed so far and our geographical expansion has begun to pay dividends.Returns from these branches will be more fully realised in the years ahead. Given thisapproach this year's theme for the annual report is "The Idea of Expansion".The essence of a successful expansion in an enterprise is a function of its readiness andits timing. I do feel that we have got both right.
Given two successful years of adequate profitability we are announcing our firstdividend in thirteen years. This reflects a long and arduous task of rebuilding the Bankfrom first principles and developing a culture that is unique to ourselves. Last year'sannual report described this culture in substantial depth. DCB Bank is on a path ofprofitable growth with its NPA's under control and adequate provisioning. On almost allratios the Bank demonstrates sound banking practices and we are determined to ensure thatthis continues year by year into the future.
I am happy to report that DCB Bank's annual results for FY 2017 demonstrated theefficacy of our strategy. We have continued to grow as per plan in all parameters.Operating Profit was up 20% at Rs. 418 crore; PBT up 17% at Rs. 307 crore and PAT up atRs. 200 crore. Our effective tax rate in FY 2017 was 34.90%. Our Balance Sheet grew by 26%to Rs. 24046 crore and our NIMs improved to 4.04%. Our Gross NPAs increased by 29% to Rs.254 crore and Net NPAs by 28% to Rs. 124 crore. The Net NPA ratio was 0.79% while ourProvision Coverage Ratio was 73.80%. This is an impressive outcome despite a verydifficult year for the economy and especially the banking sector. It illustrates that DCBBank's retail strategy is paying dividends and despite stormy seas the Bank is holding itscourse.
This year has not been an easy one. Industry saw muted growth and this reflected itselfon the SME and MSME businesses which are our major area of concentration. Most companieswere expecting a much more robust second half as the monsoons were evenly distributed andthis suggested that consumer demand would return across industry classes. Unfortunatelythe demonetisation hit the economy in the short run. Of course in the long term it canbenefit the country. DCB Bank was also impacted despite which it turned out results whichwere creditable. I was particularly proud that the unique culture that I spoke about waswitnessed in action. The dedication of our staff to our clients was exemplary; not asingle DCB Bank branch was closed even though cash was in such short supply. We tried ourutmost to ensure that cash was distributed as evenly as possible. The many letters wereceived from our customers is a proud testament to our handling of this crisis.
The year also saw a number of achievements which were recognised. We won the Best DataCentre Design award for the Bank's Data Centre in the 2016 Data Centre Summit; theBSFIDigital Innovation Award for the Innovative usage of Emerging Technology and theFinnovity Award for the first Aadhaar based ATM. The culture and human resource areas alsowere recognised. During the year we conducted over 1100 workshops that covered 90% of ouremployees with 73% of employees participating in on line learning. DCB Bank has beencertified as a Great Place to Work for building High Trust and High Performance Culture.
This all adds up to a process of continuous improvement which is a journey that willcontinue into the future. In a difficult year for the banking industry DCB Bank as thesmall private sector bank has been able to avoid the pitfalls presented by the environmentand to grow steadily maintaining a quality portfolio while enhancing its profitability.The Balance Sheet grew by 26% and is currently Rs. 24046 crore. CASA did particularlywell partly as a result of demonetisation but we intend to sustain its momentum in thecoming year.
As we look to the future we face an environment that imposes challenges acrossindustry. We need to be mindful of the role of technology and the service support that ourclients will expect in the months and years ahead. We are determined that DCB Bank will beahead of the curve that this opportunity presents through the creativity culture that wehave built up over the years and our constant emphasis on innovation. Simplicity is amajor driver of innovation. Simplifying both internal processes and the customer interfacecombined with a problem solving capability which customers in the future will demand. Getthings done quickly and efficiently will be the mantra of the future. The DCB Bank team isfully dedicated to this process and we hope to shape the possibilities that the futurewill bring.
|Nasser Munjee || |
|Chairman ||New Delhi April 14 2017 |