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Private sector lender DCB Bank posted a 61 per cent year-on-year (y-o-y) rise in net profit at Rs 63 crore for the fourth quarter (Q4) ended March 31, on the back of higher net interest income (NII).
NII — the difference between interest earned and interest expended — stood at Rs 130 crore for Q4, compared to Rs 100 crore in the previous year. As on March 31, the bank’s deposits grew 22 per cent, year-on-year (y-o-y), to Rs 12,609 crore, while net advances grew 29 per cent and stood at Rs 10,465 crore.
The tax expense for FY15 was Rs 27 crore, which was partly offset by the creation of net deferred tax asset (DTA) of Rs 10 crore. Murali M Natrajan, managing director & CEO of DCB Bank, said that excluding the impact of DTA, the net profit for Q4 of FY15 was Rs 54 crore — an increase of 36 per cent y-o-y.
NII — the difference between interest earned and interest expended — stood at Rs 130 crore for Q4, compared to Rs 100 crore in the previous year. As on March 31, the bank’s deposits grew 22 per cent, year-on-year (y-o-y), to Rs 12,609 crore, while net advances grew 29 per cent and stood at Rs 10,465 crore.
The tax expense for FY15 was Rs 27 crore, which was partly offset by the creation of net deferred tax asset (DTA) of Rs 10 crore. Murali M Natrajan, managing director & CEO of DCB Bank, said that excluding the impact of DTA, the net profit for Q4 of FY15 was Rs 54 crore — an increase of 36 per cent y-o-y.
As on March 31, 2015 the Bank’s Deposits grew by 22 per cent at Rs 12,609 crore while Net Advances grew by 29 per cent and stood at Rs 10,465 crore as compared to March 31, 2014.
The Gross Non Performing Assets (NPA) NPA stood at 1.76 per cent as on March 31, 2015 compared to 1.69 per cent a year ago. Similarly, Net NPA was at 1.01 per cent as on March 31, 2015 compared to 0.91 per cent a year ago.
Natrajan explained that there was a large corporate NPA of Rs 65 crore in the fourth quarter which impacted the books. He added that this was a company in the ship building segment which is a restructured account.
"In FY15, gross NPA opened at Rs 138 crore, but we had fresh slippages of Rs 174 crore, whereas Rs 79 crore was upgrade and recovery. Further, Rs 47 crore was write-off. However, barring this one large NPA, credit quality is not much of a challenge," he added.
CASA ratio as on March 31, 2015 was at 23.4 per cent as against 25.0 per cent as on March 31, 2014. Natrajan said that this was because savings account grew by 17 per cent. He added that with new branches being added, savings accounts will grow by 25 per cent when these branches mature.
He said that they aimed to double the balance sheet in 36-42 months. As on March 31, 2015, the Balance Sheet was at Rs 16,132 crore as against Rs 12,923 crore as on March 31, 2014, a growth rate of 25 per cent.
The bank also wants to increase its SME/MSME portfolio to 15-16 per cent. Similarly, in the next two years, Natrajan said that they also aim to bring the cost-to-income ratio to 55 per cent in two years, which now stands at 62 per cent. They plan to open 25-30 new branches this fiscal.
From April 2013 the Bank has increased its branch network from 94 to 154 and the number of employees has gone up from 2,220 to 3,352. The bank in a statement said As per our estimates, the investments in branch network and number of employees increase is approximately Rs 30 crore for the year ended March 31, 2015. These investments are expected to break even in about 18 to 24 months, it further added.
With respect to the base rate, Natrajan explained that they are confident that the term deposit rates would come down in next 3-6 months and accordingly, the base rate will come down.
