DCB posts robust Q2FY12 numbers

Development Credit bank posted a robust Q2FY12 numbers. It’s net profit increased by 177% to Rs 13.33 crore. Balance sheet size of the bank as on 30th September 2011 was at Rs 8047.8 crore against Rs 6937.6 crore previous year, growing at 16%. The scrip is trading 7% higher at Rs 43.55.

The following tables show the comparison of the banks key financials:

Most of the parameters of the bank have improved. Net NPA has decreased by 0.89 basis points YoY basis which is very good for the bank in this rising interest rate environment. Net Interest margin of the bank has improved by 0.27 basis points to 3.41%.

Bank has reduced the provisions by 53% to Rs 7.5 crore which has helped them to show good profit. Increase in profits improved return on Assets by 0.39 basis points to 0.68%. Demand from retail continued to be strong which has helped the banks Retail segment. Revenue increased by 53% to Rs 155 crore and the segment made profit of Rs 6.87 crore versus loss of Rs 9 crore in the previous year.

Corporate credit growth is slowing down which can be seen from the August IIP numbers which merely grew by 4.1%. The corporate segment of the bank witnessed a decline of 154% in profit. It also witnessed 140 basis point dip in its CASA ratio and had a small decline in Capital Adequacy ratio.

If we look at QoQ basis than to the bank has performed well. Net NPA is at the same level. While Profit increased by Rs 4 crore and NIM also went up by 30 basis points.

Overall the bank posted a very good numbers. And with interest rate at its peak we expect the bank will have a decent numbers in coming quarters and hence one can invest in the scrip in a staggering manner.