DCB Bank Sees Robust Performance In March 2013 Quarter

DCB Bank posted a stellar performance for the March 2013 quarter. Backed by the strong performance from the treasury department, it saw a bottomline of Rs 34 crore as compared to Rs 26.90 crore in the December 2012 quarter. As for the whole year, it posted a bottomline of Rs 102 crore as against Rs 55.10 crore in FY12.

Performance has been very strong on the operational front as well, with its deposits increasing to Rs 8364 crore in the March quarter from Rs 7558 crore in the December 2012 quarter and Rs 6336 crore in the March 2012 quarter. It fared well on the advances front too, which came in at Rs 6586 crore for this quarter as compared to Rs 5964 crore in the previous one.

Despite such a strong growth in advances, DCB Bank has managed to maintain its asset quality. In fact, it actually saw an improvement on the Gross NPAs front, which stood at 3.18% as against 3.80% in December 2012 and were as high as 4.40% in March 2012. This is certainly creditable, more so in a scenario when most banks are struggling on the asset quality front. The bank’s Net NPAs for the March 2013 quarter stood at just 0.75%, showing a marginal increase from 0.73% posted in December 2012.

As regards the other parameters, its CASA ratio declined to 27.20% from 28.87% in December 2012. However, the bank has managed to put in better net interest margins (NIM) in the March 2013 quarter, at 3.52% as against 3.38% in December 2012. On a whole year basis (FY13), the NIMs were 3.34% as against 3.25% in FY12.

The bank is adequately funded, and its Capital Adequacy Ratio (CAR) for the elapsed quarter was at 13.61%, a marginal decline from 13.71% in December 2012.

Overall, the performance of the bank has been better than the street’s expectations. We had recommended DCB Bank to investors in DSIJ Vol. 27, Issue # 23 (dated Oct 22- November 4, 2012) when it was trading at Rs 43. We maintain our ‘buy’ call on this counter.