Development Credit Bank Q4 net jumps 52% on lower NPAs

Development Credit Bank (DCB) today reported 52% rise in net profit at Rs 17.3 crore in the fourth quarter ended March 31 as against Rs 11.4 crore in the year-ago period on the back of lower provisioning and overall reduction in costs.

"We have seen all-round improvement in our performance in Q4 as well as during the entire fiscal, driven by lower provisioning, reduction in overall cost and better quality of our loan books," DCB Bank Managing Director and CEO Murali M Natrajan told PTI over phone from Bangalore.

During the quarter under review, the bank's gross NPA ratio came down to 4.40% at Rs 7 crore from 5.85% or Rs 11 crore. Its net NPA ratio improved to 0.57% from 0.96%.

For the full year, the bank, which primarily focuses on MSMEs, SMEs and retail mortgages, saw its net profit more than doubling to Rs 55.1 crore from Rs 21.4 crore, driven by lower provisioning which massively came down to Rs 29 crore from Rs 65 crore.

On the bad loan front, Natarajan said, for the bank, which had quit unsecured loan portfolio in 2009, the stress came from some corporate loans during the quarter, but did not specify the sectors.

Going forward, Natarajan said he sees more pressure on the margins at least in the next two quarters and muted pick up in advances at around 3-4%. However, he sounded bullish for the full fiscal (FY13), saying the loan book will grow by 22-24%.

The lender saw its cost of funds going up to 7.57% from 7.16% in Q4, bringing down its NIM to 3.12% from 3.15%. For the full fiscal, NIM was 3.25% as against 3.13% last fiscal.