DCB Bank Q3 Results Review - Growth Trends Improve; Low Credit Costs Aid PAT Growth: Dolat Capital
Despite rising interest rates, enquiries and conversion rates in the mortgage book remains strong.
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Dolat Capital Report
DCB Bank Ltd. reported a good quarter with net interest income growth 29% YoY, with sequential net interest margin expansion of 14 basis points to 4%. Loan growth at 5.4% QoQ and 19% YoY was better than expected.
Despite de-growth in pre-provision operating profit YoY led by higher opex and lower other income, profit after tax grew by 51% YoY owing to lower credit costs.
Slippages at 4.9% moderated QoQ, but continue to be impacted by Reserve Bank of India’s out of order notification for credit card/overdraft facilities, offset by equally strong recoveries, with credit costs of 50 bps for the quarter. Stress in the restructured/Emergency Credit Line Guarantee Scheme portfolio has been limited.
DCB Bank stands out for its granular lending franchise and strong collection/recovery capabilities.
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