DCB Bank reported a 21.08 per cent drop in its standalone net profit to ₹64.94 crore in the second quarter of the fiscal compared to ₹82.29 crore in the corresponding quarter a year ago.

The board of directors on Saturday also gave its in-principle approval to the lender to invest up to ₹2.04 crore to acquire 9.9 per cent shares in Svakarma Finance.

Svakarma Finance is an NBFC engaged in lending to micro, small and medium enterprises to meet their business requirements and to other financial institutions engaged in lending to these enterprises. In a stock exchange filing, the bank said it expects to complete the acquisition by December 31, 2021.

Meanwhile, for the quarter ended September 30, 2021, net interest income (NIM) declined by 3.3 per cent to ₹323 crore from ₹334 crore in the same quarter last fiscal. Net interest margin was at 3.37 per cent for the second quarter of the fiscal.

“NIM continues to be negatively impacted due to slippages and above normal liquidity maintained during this period,” DCB Bank said in a statement on Saturday.

Gross non performing assets

Non interest income however, increased by 21 per cent to ₹98 crore in the second quarter of the fiscal as against ₹81 crore a year ago. Provisions declined by 14.9 per cent to ₹86.33 crore in the July to September 2021 quarter from ₹101.45 crore a year ago.

Both gross non performing assets and net NPA slightly reduced in comparison to June 30, 2021. The Gross NPA as on September 30, 2021 was at 4.68 per cent of gross advances and net NPA was at 2.63 per cent compared to the gross NPA at 4.87 per cent and net NPA was at 2.82 per cent as on June 30, 2021.

However, they were significantly higher compared to September 30, 2020 when gross NPA was at 2.27 per cent and net NPA was at 0.83 per cent.

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