DCB Bank posts disappointing Q1FY16 results

DCB Bank declared the first quarter result on July 14, 2015. The bank's total income rose by 6.73 per cent to Rs 404 crore in Q1FY16 on sequential basis. The total expenditure of the bank increased by 5.46 per cent to Rs 114 crore in Q1FY16 as compared to previous quarter. Its total expenditure increased predominantly due to a 8.91 per cent increment in employee expense during the quarter.

DCB Bank's EBIT increased by 7.23 per cent to Rs 290 crore in Q1FY16 against Rs 271 crore in Q4FY15. The bank's PBT boosted by 33.46 per cent to Rs 72 crore in Q1FY16 on sequential basis because its other income increased by 36.42 per cent to Rs 63 crore during the quarter. However, its interest expense increased by 5.93 per cent to Rs 264 crore in Q1FY16 on quarter on quarter basis. The PBT margin of DCB Bank expanded by 355 basis points to 17.72 per cent in Q1FY16 on sequential basis. PAT of the bank declined by 25.52 per cent to Rs 47 crore in Q1FY16 because it received a  tax benefit of Rs 9 crore in Q4FY15. Hence, Its PAT margin contracted by 502 basis points to 11.59 per cent in Q1FY16 compared to previous quarter. The Net Interest Margin of the DCB Bank expanded by 6 basis points to 3.81 per cent in Q1FY16 on sequential basis.

The asset quality of DCB Bank declined and gross NPA (Non performing Assets) stood at 1.96 per cent to Rs 186 crore in Q1FY16 against 1.76 per cent to Rs 206 crore in Q4FY15. The increment in NPA due to reduction of Rs 10 crore in one corporate account and reduction of Rs 13 crore in gold loans because of operational reasons. 

Its net NPA expanded by 21 basis points to 1.22 per cent amounting  to Rs 127 crore in Q1FY16 and hence the bank increased its provisions and contingencies by 26 per cent to Rs 18.03 crore against Rs 14.31 crore in Q4FY15. The DCB Bank's retail deposits per branch remained at Rs 50.1 crore for Current Account and Saving Account and Rs 18.1 crore for term deposits in Q1FY16.

Considering segment results, DCB Bank's treasury segment revenue boosted by 15 per cent to Rs 185 crore in Q1FY16 on quarter on quarter basis. The bank earned revenue of 55.67 per cent as a percentage of sales from retail banking segment, 28.28 per cent as a percentage of sales from treasury segment, 15.11 per cent as a percentage of sales from wholesale banking segment, and remaining 0.45 per cent as a percentage of sales from banking operations segment during the Q1FY16.

On yearly basis, the DCB Bank revenue grew by 14.8 per cent to Rs 404 crore in Q1FY16. Total expenses of the bank rose by 23.4 per cent from Rs 92 crore in Q1FY15 to Rs 114 crore in Q1FY16. It’s PAT increased by 5 per cent to Rs 47 crore in Q1FY16 on yearly basis. However, its PAT margin contracted by 108 basis points to 11.59 per cent in Q1FY16 compared to same period of previous financial year.

On disappointing Q1FY16 results, the share price of DCB Bank declined by 6.54 per cent and trading at Rs 134.1 on intraday. 

DCB Bank is a modern emerging new generation private sector bank has 157 branches across 16 states and 2 union territories. It is a scheduled commercial bank regulated by the Reserve Bank of India. DCB Bank’s business segments are Retail, Micro-SME, SME, Mid-Corporate, Agriculture, Commodities, Government, Public Sector, Indian Banks, Co-operative Banks and Non Banking Finance Companies (NBFC). The bank has approximately 5 lakh customers.