DCB Bank to take a call on raising further capital in Q4 FY20, says MD

Q4 net up 50%; NIM to compress for two quarters on raising further capital in Q4 FY20

Private sector lender DCB Bank said today that it will take a call on raising further capital in the fourth quarter of the current financial to support growth plans for the medium term.

“We do for next six to nine months I do not see us requiring any capital. As the year progresses, we will see the trajectory of performance and evaluate requirements. After December 2019 we will have a look at it,” said Murali M Natrajan, managing director and chief executive officer, DCB Bank.

The bank's capital adequacy ratio was 16.81 per cent at the end of March 2019. Of which its tier I was 13.10 per cent. 

At present, the bank has enough capital to support business growth, said Natrajan. 

The bank, backed by the Aga Khan Fund for Economic Development (AKFED), had raised Rs 380 crore through qualified institutional placement (QIP) in 2017 and Rs 250 crore through QIP in 2014. In 2012, it raised Rs 233 crore, out of which Rs 139 crore was through a preferential allotment and Rs 94 crore via QIP.

The bank has maintained that it would double its balance sheet in 3-4 years. The annual growth is expected to be 20-22 per cent. The balance sheet stood at Rs 35,791 crore at end of March 2019. 

The bank posted a 50 per cent rise in net profit at Rs 96.3 crore in Q4 FY19 over Rs 64.2 crore in January-March quarter of 2017-18. For the entire financial year 2018-19, its net profit rose 33 per cent to Rs 325 crore from Rs 245 crore in 2017-18.

The net interest income increased in Q4 14 per cent to Rs 301 crore, while non-interest income rose 17 per cent to Rs 99 crore.

DCB Bank's net interest margin (NIM) for FY 2019 declined to 3.83% as from 4.16% for FY 2018. The NIMs will continue to compress for two quarters, he said. Its stock closed flat at 202.45 per share on BSE.