Private sector lender Development Credit Bank ’s (DCB) fourth quarter (Jan-March) net profit climbed 52% year-on-year to Rs 17.3 crore on back of robust loan book that expanded 23% y-o-y to Rs 5,284 crore. For the full fiscal year, net profit rose nearly three-fold to around Rs 55 crore as against Rs 21 crore a year back.
During the year, net interest income or the difference between interest earned and spent rose more than 20% to Rs 228 crore. Net interest margin (NIM) stood at 3.25% as against 3.13% a year ago. The entire banking industry has seen a credit growth of around 16.80% y-o-y.
"We are growing MSME, SME and Retail Mortgages with a strong focus on quality,"Murali M. Natrajan, Managing Director & CEO, DCB said in a release.
"NIMs will be a challenge for the first few months of FY 2013 as a lot of term deposits are continuing to get re-priced upwards. Our aim would be to continue to steadily improve the performance of the Bank in the coming years."
The bank's deposit base grew at a slower pace 13% y-o-y at Rs 6,336 crore while its share of current account savings account (CASA) to total deposits fell from 35.21% to 32.12% in the FY12. CASA is a cheap source of funds for lenders who usually pay 0-4% rate of interest on it compared with 9%-12% in other instruments.
However, DCB has managed to improve its asset quality. Its gross non-performing asset (NPA) ratio dropped from 5.85% to 4.40% in the 12 month period. Net NPA ratio too fell from 0.96% to 0.57%. Provisions stood at Rs 29 crore as against Rs 65 crore in FY11.
DCB shares fell nearly 5% to close at Rs 48.15 at the end of Friday's trading.
Source: www.moneycontrol.com
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Gaurav Agarwal
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DENIP Consultants Pvt Ltd
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