DCB Bank's net profit drops 57%, NPAs rise in June quarter
Premium- Net interest margin and consequently net interest income were negatively impacted due to higher slippages and maintaining high liquidity, the bank said
MUMBAI : DCB Bank Ltd report 57% year-on-year drop in net profit in the June ended quarter owing to lower net interest income and higher slippages.
The Mumbai-based lender reported net profit of Rs34 crore at the end of June quarter compared to Rs79 crore in the same quarter last year.
Net interest income stood at Rs309 crore as on 30 June compared to Rs307 crore a year ago. Net interest margin and consequently net interest income were negatively impacted due to higher slippages and maintaining higher than "business as usual" liquidity, the bank said in the statement.
The gross non-performing assets as a percentage of total assets stood at 4.87% at the end of June quarter compared to 4.09% in the previous quarter. The bank added fresh bad loans worth Rs519.6 crore during the quarter.
Provisions against bad loans and contingencies stood at Rs155 crore at the end of June quarter compared to Rs83 crore a year ago. Provisions stood at Rs101.18 crore in the previous quarter.
Non-interest income rose 55% to Rs120 crore at the end of June quarter owing to one-time treasury gains in the first quarter.
Advances rose 2% year on year to Rs2.54 trillion at the end of June quarter compared to Rs2.50 trillion a year ago. Advances fell 1.8% sequentially.
“Our chosen strategy of focusing on secured small / medium ticket lending (as opposed to unsecured lending) for the past many years is certainly helping cope with the impact of Covid19 lockdown(s) on our portfolio," said Murali Natrajan, managing director and chief executive officer, DCB. “Assuming third wave is less severe, from hereon we expect steady improvement in collections, recoveries and new business," he added.
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