DCB Bank cracks post Q2 net profit declines 10%

There is a 10% drop in the net profit from Rs 41 crore to Rs 37 crore on higher provisioning and tax expenses

Shares of private sector lender DCB Bank have cracked 19% at Rs 108 on the BSE after the bank posted 10% drop in the net profit from Rs 41 crore in Q2 FY15 to Rs 37 crore in the Q2 FY16 on the back of higher provisioning and tax expenses.

Provisioning towards bad loans and other contingencies jumped 58% to Rs 22 crore as against Rs 14 crore last year.

Net interest income, the difference between interest earned and interest expended, grew 27.44 per cent to Rs 150 crore from Rs 117.7 crore year-on-year. In the same period, other income also grew by 31.8 per cent to Rs 48.70 crore.

 

Net interest margin, a key indicator of bank’s profitability, improved to 3.79 per cent during the quarter from 3.72 per cent in the year-ago period.

Meanwhile, the company plans to o double its branch network within by 12 monts. At present, DCB has 160 branches. “Competition is going to increase dramatically in the next one year on account of new payments banks, small finance banks being set up and also on account of existing banks increasing their expansion. So we need to be prepared for it,” Natrajan said.

The stock opened at Rs 120 and touched a low of Rs 106.80 on the BSE. A total of 3,089,507 shares changed hands on the BSE so far.