DCB Bank falls 11% post June quarter results

DCB Bank dipped 11% to Rs 160 on the BSE in intra-day trade after net interest margin (NIM) of the private sector lender declined 33 bps year on year (yoy) at 3.9% in June quarter. NIMs were stood at 4.23% for Q1FY18 and 4.09% for Q4FY18.
“Margins are under pressure especially in mortgage and corporate loan book. We continue to be watchful of NPAs,” said Murali M. Natrajan, Managing Director & CEO, DCB Bank.

Gross non-performing assets (NPA) ratio for Q1FY19 came at 1.86% against 1.74% in the same quarter last fiscal. Net NPA for the quarter were flat quarter on quarter (qoq) and down 20 bps yoy at 0.72%.

The bank’s net profit grew 7.7% at Rs 700 million in Q1FY19 as against Rs 650 million in Q1FY2018. NII has improved 17.1% yoy to Rs 2.73 billion as compared to Rs 2.33 billion reported in the same period of the previous fiscal.

“Slippages inched up to Rs 1.07 billion (2.6% v/s 2.2% in 4Q), led by elevated slippages in Agri and Inclusive Banking (AIB). Healthy recoveries and upgrades at Rs 680 million led to an 8.6% qoq increase in GNPA to Rs 4 billion. However, the bank shored up its calculated PCR to 61.6% (60.2% in 4Q), leading to a 5% qoq rise in NNPA to Rs 1.54 billion. GNPA/NNPA (%) increased 7bp/0bp to 1.86%/0.72%,” Motilal Oswal Securities said in result update.