Supported by higher interest income, private sector lender Development Credit Bank ’s (DCB) second quarter (July-Aug) net profit shot up nearly three fold to Rs 13.3 crore year-on-year. Net interest income rose more than 28% to Rs 59 crore Y-o-Y. With this, it became the first lender to declare its September quarter results.
During the three months period, net non-performing assets (NPAs) dropped by 22 basis points to 0.97% quarter-on-quarter.Gross NPAs too fell by 15 bps to 5.75%. Better asset quality seems to have aided bank’s interest margin. Consequently, its net interest margin (NIM) improved sequentially from 3.10% to 3.41%.
It is worth mentioning here that repeated rate hikes by the Reserve Bank of India (RBI) led to a general concern about banks’ asset quality.
DCB’s loan book, however, grew 12% to Rs 4,315 crore, which is below the 18% mark, industry’s credit growth projection set by RBI. Deposits expanded 14% to Rs 6,262 crore. Current account and savings account or CASA ratio stood at 33.3% (out of total deposits) as against 34.6% a year back. CASA helps bring down the cost of funds as banks only pay 0-4% interest.
In June quarter, the bank again turned its business profitable after a short spell of losses. It reported a net profit of Rs 8.8 crore compared to a net loss of Rs 2.9 crore during the same period in 2010.
Source: www.moneycontrol.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
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