The Hindu Business Line : Development Credit Bank net profit rises 420%

Mangalore, May 7 Aided by growth in non-interest income and net interest income, the private sector Development Credit Bank (DCB) Ltd showed a growth of 420 per cent during 2007-08.

The bank recorded a net profit of Rs 38.33 crore during 2007-08 as against Rs 7.37 crore in 2006-07. The operating profit stood at Rs 109.61 crore (Rs 40.25 crore).

Speaking to Business Line over phone from Mumbai on Wednesday, Mr Gautam Vir, Managing Director and Chief Executive Officer of DCB Ltd, said: “Fundamentally we have grown the balance sheet of the bank. The loan book has registered a growth of 53 per cent, and the net interest income has seen a growth of 56 per cent. We had a good growth in non-interest income at 76 per cent.,” he said.

On non-interest income, he said the treasury had a very good year, and the life insurance distribution business and trade finance business also witnessed a growth. “We also had some gains from the sale of written-off accounts,” he said. The non-interest income of the bank stood at Rs 162.56 crore (Rs 92.49 crore) during the year.

The net interest income of the bank stood at Rs 186.11 crore (Rs 119.55 crore) during 2007-08, registering a growth of 56 per cent.

The bank witnessed a growth of 38 per cent in deposits. During 2007-08, the deposits of the bank stood at Rs 6,074.85 crore (Rs 4,415.20 crore).

Mr Vir said that the CASA (current account saving account) contributed 26 per cent to the total deposits of the bank. The bank will be focusing on CASA growth so that NIMs don’t decline but increase over a long-term period. This will help the bank have sustainable growth and may impair short-term balance sheet and loan growth.

Total advances of the bank stood at Rs 4,068.80 crore (Rs 2,658.31 crore), recording a growth of 53 per cent.

During the last fiscal, the net NPA of the bank stood at 0.7 per cent (1.6 per cent).

When asked about the exposure of the bank in forex derivatives, Mr Vir said the bank has a very marginal exposure in derivatives segment. “We have no losses on that particular front,” he said.

Q4 RESULTS

The net loss for the fourth quarter of 2007-08 stood at Rs 7.61 crore as against the loss of Rs 0.41 crore in the corresponding period of the previous fiscal. This has been attributed to the increase in tax and provisioning.

A bank release said here on Wednesday that the bank’s balance sheet has doubled over the last two years and the strategy of focusing in select western India corridor, select SME clusters with a focus on retail and SME remains intact. The bank diversified its product base, increased distribution and invested on increasing the CASA base of the bank, it added.

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