DCB Bank Q2 net jumps to Rs 33 crore

MUMBAI: Private sector lender DCB Bank today posted a 50 per cent increase in the September quarter net at Rs 33 crore, driven by a jump in the core income.

The city-based bank, which converted into a private lender from the co-operative space, had posted a post tax profit of Rs 22 crore in the year-ago period.

Its net interest income was up 35.82 per cent to Rs 91 crore, from the year ago's Rs 67 crore, while the non interest income was flat at Rs 27 crore.

The bank's net interest margin expanded to 3.68 per cent from the preceding quarter's 3.44 per cent.

However, its managing director and chief executive Murali Natrajan said it will not be able to sustain the momentum because it expects an increase in its cost of funds and higher proportion of the low yielding priority sector lending in the next two quarters.

"For the entire year, our NIMs will be same as the last year's 3.34 per cent," he told PTI.

The bank's gross non performing assets ratio stood stable at 3.41 per cent and Natrajan said the stress is emanating from the SME book.

Natrajan said the bank was not impacted much on the treasury losses front as a result of the the RBI's liquidity tightening moves, adding that it has taken the entire hit of Rs 75 lakh in a single quarter.

During the reporting quarter, it witnessed a 18 per cent rise in advances and 23 per cent on deposits.

Natrajan said the share of the low-cost current and savings account deposits fell during the quarter to 26.9 per cent and a bulk of accretion was on the term deposits front.

The DCB Bank scrip lost 2.60 per cent to close at Rs 50.55 a piece on the BSE, whose 30-share Sensex shed 0.59 per cent.

The bank opened two branches during the quarter to take the total tally to 102 and aims to close the fiscal with a network of 120-125 branches, Natrajan said.