Development Credit Bank posts 50% rise in net profit in Q2

Development Credit Bank Ltd (DCB), reported a 50 per cent increase in the net profit to Rs 33 crore in the quarter ended September 30, 2013 as compared to the net profit of Rs 22 crore for Q2 FY2013, primarily driven by the growth in the advances and better margins.

During the reporting quarter, the bank also saw its balance sheet grow 20 per cent to Rs 11,125 crore as against Rs 9,298 crore as on September 30, 2012. The bank’s net advances grew 18 per cent to Rs 6,677 crore in the reporting quarter.

The bank focuses on lending to individuals, MSME, mid-size corporates, microfinance, agricultural and commodities as a business.

Murali Natrajan, managing director & CEO of DCB, said, “Branch expansion and growth is likely to pick up in the coming quarters. So far, NPAs (non-performing assets) are in control. The environment is challenging so we need to be careful and cautious.”

The bank’s deposits grew 23 per cent year-on-year to Rs 8,788 crore while net advances grew 18 per cent in the same period and stood at Rs 6,677 crore.

The bank’s Capital Adequacy Ratio stood at 13.81 per cent as of September 30, 2013.

Retail deposits (Retail CASA and Retail Term Deposit) continued to provide stable resource base to the bank with retail deposits pegged at 79 per cent of total deposits at the end of the quarter.

However, CASA ratio as on September 30, 2013 dropped to 26.9 per cent as against 30.4 per cent as on September 30, 2012.

Net Interest Margin (NIM) was at 3.68 per cent, up 44 basis points on a y-o-y basis. During the reporting quarter, the bank opened two new branches taking its total to 103 branches in 53 locations.

The bank’s scrip last traded at Rs 50.55, down 2.6 per cent on BSE in a weak Mumbai market on Tuesday. The bank released its financials after the market closed for trading.

The private bank is backed by private equity firm Tano Capital, Wolfensohn Capital Partners, TVS Capital and Tata Capital among others.

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