 "DCB Bank Q4 net profit up 10%")
DCB Bank (formerly Development Credit Bank) reported a 10.5 per cent increase in net profit in the January-March 2016 quarter. Profit inched up by only two per cent to Rs 195 crore in FY16, compared to the previous financial year. Net interest income, the difference between interest earned and interest expended, increased 30 per cent to Rs 169 crore in the fourth quarter of FY16 compared to Rs 130 crore in the year-ago period. Other income also inched up 33 per cent to Rs 61.45 crore in the quarter under review, compared to Rs 46.27 crore a year ago.
The private sector lender’s asset quality improved slightly with the gross NPA reducing to 1.51 per cent in the quarter ended March 2016 from 1.76 per cent in the same quarter last year.
In the same period, net NPA reduced to 0.75 per cent from 1.01 per cent.
Murali Natrajan, managing director and chief executive officer of the bank, attributed the improvement in asset quality to recoveries and upgradation. “We had a good fourth quarter in terms of recovery and less slippages. We also sold Rs 58 crore to asset reconstruction companies.”
However, provisions increased to Rs 27 crore compared to Rs 14 crore in the March 2015 quarter.
The improvement in asset quality also led to better net interest margin (NIM), a key indicator of a bank’s profitability. NIM for FY16 was at 3.94 per cent compared to 3.72 per cent in the previous financial year.
The bank remained well capitalised with a capital adequacy ratio of 14.11 per cent at the end of the March 2016 quarter. The bank also raised Rs 87 crore of Basel-III-compliant tier-2 bonds.
Natrajan said the bank would raise up to Rs 200 crore via tier-2 bonds in FY17.
