DCB Bank Q3 net profit falls 21.7% on lower other income and higher expenditure

DCB Bank reported a 21.7 per cent drop in its net profit to ₹75.37 crore in the third quarter of the fiscal from ₹96.21 crore in the same period last fiscal. The decline was on the back of lower other income and higher expenditure.

For the quarter ended December 31, 2021, the bank’s net interest income increased by 3 per cent to ₹345 crore from ₹335 crore a year ago. Net interest margin was 3.61 per cent compared to 3.37 per cent in the second quarter and 3.31 per cent in the first quarter.

Non-interest income declined by 24.4 per cent on a year-on0year basis to ₹118 crore.

Operating expenses increased by 24.8 per cent to ₹264.53 crore for the third quarter of the fiscal from ₹211.94 crore in the same period of the last fiscal.

Provisions, however, declined by 35.3 per cent to ₹96.98 crore in the December 2021 quarter from ₹149.83 crore a year ago.

Asset quality deteriorates

The gross NPA as on December 31, 2021, was at 4.73 per cent of gross advances compared to 1.96 per cent as on December 31, 2020. Net NPA was 2.52 per cent of net advances, down from 1.01 per cent a year ago.

“We are satisfied with the progress on NPA recoveries and upgrades. Monthly fresh NPA slippages in mortgages, commercial vehicles, SME/MSME and AIB are almost back to pre Covid-19 levels. We are building frontline capacity to step up growth,” said Murali M Natrajan, Managing Director and CEO, DCB Bank, in the release.

Kaabil Finance shares acquisition

In a separate stock exchange filing on Wednesday, DCB Bank said its board has given in principle approval to invest up to ₹25 lakh to acquire 5.95 per cent of post issued paid up equity share capital of Kaabil Finance Private Limited. The acquisition is likely to be completed by March 31, 2022.

Kaabil Finance is a Rajasthan based NBFC. It is engaged in financing individuals for secured business loans and gold loans. 

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February 09, 2022