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DCB Bank (formerly Development Credit Bank) posted a marginal rise of ₹2 crore in net profit for the first quarter ended June 2015, to ₹47 crore. The profit was driven by one-time pre-tax treasury gains of ₹22 crore.
Rising expenses Higher operating expenses (₹114 crore in Q1FY16 compared to ₹92 crore in Q1FY15), higher interest expenses (₹264 crore from ₹213 crore), and increase in bad loans limited the bank’s profits.
Murali Natrajan, Managing Director and CEO, said, “We are making cost investments for building growth momentum. It is not easy to grow profitably in a challenging environment. Also, there is keen competition amongst banks/ NBFCs. We continue to be watchful of corporate and SME portfolios.”
Interest income During the quarter, net interest income was almost flat at ₹140 crore (₹139 crore) due to increase in interest expenses. Non-interest income jumped 85 per cent to ₹63 crore from ₹34 crore.
Gross non-performing assets (NPAs) increased to 1.96 per cent as at June-end, 2016, from 1.78 per cent a year ago. Similarly, net NPA ratio also rose to 1.22 per cent from 0.97 per cent. As on June 30, 2015, the bank’s advances and deposits both grew 26 per cent to ₹10,426 crore and ₹13,269 crore, respectively. The bank’s capital adequacy ratio stood at 14.27 per cent.
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