Dena Bank net zooms on income boost
CORPORATE SCORECARD
| The bank's net profit stood at Rs 55.58 crore in the June quarter up from Rs 18.49 crore a year earlier. Net interest income grew by 13.85 per cent to Rs 224.69 crore at the end of June from Rs 197.36 crore a year earlier. |
| Net interest margin (NIM) fell to 3.11 per cent at the end of June from 3.22 per cent a year earlier. However, the NIM improved by 11 basis points from 3 per cent at the end of March 2007. |
| While the yield on advances increased by 200 basis points to 10.02 per cent, the cost of deposits rose by 91 basis points to 5.57 per cent in the quarter ended June 2007 from a year earlier. Non-interest income grew 20.83 per cent to Rs 75.17 crore in the first quarter from Rs 62.21 crore a year earlier. |
| The bank's deposits increased by 15.71 per cent to Rs 27,968 crore, while advances grew 20.27 per cent to Rs 18,255 crore. Retail advances rose 40 per cent to Rs 3314 crore, forming 18.15 per cent of total advances. |
| The level of gross non-performing assets (NPAs) fell to 4.11 per cent from 6.42 per cent, while the net NPA ratio came down to 2.07 per cent from 3.25 per cent a year earlier. |
| The bank plans to bring down its gross NPA level and net NPA level to 2.5 per cent and 1 per cent, respectively by March 2008. |
| The bank's capital adequacy ratio (CAR) stood at 11.90 per cent up from 10.46 per cent a year earlier. Tier I capital was 6.44 per cent. |
| "We have headroom to raise Rs 775 crore of capital by way of perpetual debt and upper tier II and tier II bonds on the March 2007 base," said PL Gairola, chairman and managing director, Dena Bank. |
| The bank is likely to reduce its deposit rates across maturities by 50-75 basis points at the end of this month, said Gairola. This is likely to be followed by a review of the prime lending rate (PLR) in August. |
| The bank is also in talks to partner State Bank of India (SBI) for issuing co-branded credit cards. "We have a credit card base of 10,000. However, this is not profitable," said Gairola. |
| A senior bank official said the bank had seen high defaults on its credit card portfolio and had decided not to grow its credit card base. |
| Under the tie-up arrangement, SBI would bear the credit risk on the credit card while Dena Bank in turn would receive a royalty for marketing and distributing the card. |