DCB Bank gains after Q4 PAT rises 13% YoY to Rs 78 cr

DCB Bank rose 2.59% to Rs 93.10 after the bank's standalone net profit jumped 13.3% to Rs 77.91 crore on 4% decrease in total income to Rs 971.16 crore in Q4 FY21 over Q4 FY20.

Net Interest Income fell 4% year-on-year (YoY) to Rs 311 crore in Q4 FY21. Non-Interest Income rose 22% YoY to Rs 134 crore in Q4 FY21.

The bank's provisions and contingencies fell 14.43% to Rs 101.18 crore in Q4 FY21 over Q4 FY20.

Gross non-performing assets (NPAs) stood at Rs 1,083.44 crore as on 31 March 2021 as against Rs 502.27 crore as on 31 December 2020 and Rs 631.51 crore as on 31 March 2020. The ratio of gross NPAs (GNPA) to gross advances stood at 4.09% as on 31 March 2021 as against 1.96% as on 31 December 2020 and 2.46% as on 31 March 2020. The ratio of net NPAs (NNPA) to net advances stood at 2.29% as on 31 March 2021 as against 0.59% as on 31 December 2020 and 1.16% as on 31 March 2020.

During the quarter ended 31 March 2021, on a prudent basis the bank has made a contingency provision of Rs 124 crore towards further likely impact of COVID-19 on restructured and stressed assets. As on 31 March 2021, in addition to this contingency provision of Rs 124 crore, the bank also holds floating provision amounting to Rs 108.80 crore, besides provisions for standard assets and specific non-performing assets.

The average liquidity coverage ratio (LCR) for Q4 FY21 was at 138.26%.

As on 31 March 2021 the net restructured standard advances including COVID-19 relief stood at Rs 968 crore largely contributed by mortgages, commercial vehicles and SME/MSME. The collection efficiency was improving steadily until 31 March 2021. However, on account of second wave disruptions the bank expects restructured loans to increase further using the recently announced progressive measures by the RBI.

DCB Bank's headcount was 6,432 as on 31 March 2021 from 6,845 as on 31 March 2020. In anticipation of increasing new loan disbursals / business from Q1 FY22, the bank was steadily increasing its headcount. However, as per current situation, it appears that new business momentum is likely to improve from Q2 FY22, provided the second wave starts to weaken in the next few days, the bank said.

Commenting on the Q4 FY2021 results, Murali M. Natrajan, the managing director (MD) and chief executive officer (CEO), has said: "The sudden increase in COVID-19 infections on account of second wave has once again necessitated curfews, restrictions, and lockdowns. As of now, it appears that much of Q1 FY2022 may be consumed by dealing with the second wave and normally may return only by end of June 2021. This current situation is having some impact on Collections Efficiency and new business."

DCB Bank is a private sector bank. Its branch network stood at 352 as on 31 March 2021. The bank intends to add 20-30 branches in the next 12-15 months.

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