DCB Bank reported a net profit of Rs 73 crore for the quarter ended September 2018 up 25 per cent compared to Rs 59 crore reported a year ago. Profit was driven by a 27 per cent growth in net advances due to high demand for mortgages and rural loans.
The bank’s advances increased to Rs 22,069 crore from Rs 17,395 crore a year earlier resulting in a 14 per cent rise in net interest income which is the difference between the interest a bank earns on loans and that it pays for deposits.
“We are satisfied with the progress achieved by the bank, while continuing to achieve growth especially in retail, MSME/SME and Agri & Inclusive Banking. Strong focus on cost productivity is showing results,” said Murali Natrajan, CEO, DCB Bank. Mortgages, which have traditionally dominated the bank’s advances, rose by 28 per cent and constituted 40 per cent of the loan book. Agricultural loans grew even faster at 36 per cent and increased share in the loan book to 19 per cent.
Corporate loans and advance to MSMEs were constituted 15 per cent and 12 per cent of the loan book respectively. The bank also saw total deposit growth of 27 per cent to Rs 26,169 crore but low cost current and savings account deposits fell from 25.9 per cent of total deposits in September 2017 to 24.3 per cent in September 2018. The bank’s cost of funds increased to 6.59 per cent from 6.49 per cent a year earlier.