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DCB Bank is planning to focus on its retail and small and medium enterprises businesses, and it believes that credit demand is now picking up in these sectors.
“We have a diversified portfolio but our concentration will be on retail and SME banking,” said Murali Natrajan, Managing Director and CEO, DCB Bank.
The private sector bank has a large mortgage book. As on June 30 this year, 40 per cent of its net advances was for mortgages, with 12 per cent for SME and MSME sectors, and 17 per cent for corporate banking, among others. Natarajan said the economy seems to be bouncing back after demonetisation and the roll-out of the Goods and Services Tax, and there has been an increase in credit demand in the last few quarters.
“I look at two sets of data – our own book as to how the customer’s behaviour is. Second, the comments from experts on macro-economic developments. Both sets of data indicate that in the last few months, there is some level of uptick in credit demand,” he told BusinessLine.
Demand is also picking up in commercial vehicles and for personal loans, he added.
Q1 profit
DCB Bank, which posted a 6.6 per cent increase in its first quarter net profit to ₹69.5 crore, also plans to double its loan book to close ₹40,000 crore in the next three- to three-and-a-half years from the current ₹21,242 crore.
“In terms of branch expansion, we have 323 branches at present, and plan to add 15 to 20 branches this year and again next year,” said Natrajan.
Despite a slight increase in gross non-performing assets (NPAs) at 1.86 per cent of gross advances in the first quarter of the fiscal, compared to 1.74 per cent a year ago, Natrajan said the bank remains on track.
“We expect the trend for our gross NPAs to be below 2 per cent and net NPAs to remain at less than 1 per cent. We don’t see a major concern in our NPA book,” he said.
For the quarter ended June 30, the bank reported net NPAs of 0.72 per cent, compared to 0.92 per cent in the same period a year ago.
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