MOSL: DCB BANK (Neutral)-Growth picks up post temporary demon-led disruption
​DCB Bank: Growth picks up post temporary demon-led disruption
(DCBB IN, Mkt Cap USD0.8b, CMP INR173, TP INR170, 2% Downside, Neutral)
- DCB Bank (DCBB) reported healthy PBT growth of 17% YoY (3% QoQ) to INR814m (in-line). PAT, however, declined 24% YoY (+3% QoQ) to INR529m (in-line), as DCBB had taken accumulated tax benefits in 4QFY16, due to which tax provisions were nil. In the current quarter, the tax rate was ~35%.
- NII grew 31% YoY to INR2.2b, helped by 25%+ growth in interest earning assets and 10bp YoY improvement in reported margins. NIM improved 16bp QoQ after adjusting for one-off IT refund of ~INR45m received in 3Q.
- Performance on asset quality was impressive as concerns were high due to the impact of demonetization on SME loans. Slippages declined 6% QoQ to INR750m, with ~INR200m being one large corporate account slipping into NPL. Recoveries and upgrades improved to INR393m from INR200m (ex of ARC sale) a quarter ago. GNPA increased just 12% QoQ in absolute terms.
- Loans grew 9% QoQ and 22% YoY to INR158b, driven by agri loans (+15% QoQ) and SME loans (+18% QoQ). Even retail loans grew 7% QoQ, forming 55% of overall loans (of which ~80% are mortgage loans).
DCB Bank Limited is a scheduled commercial bank. The Bank's segments include Treasury Operations, Corporate/Wholesale Banking, Retail Banking and Other Banking Operations. The Treasury Operations segment includes all financial markets activities undertaken on behalf of the Bank's customers, trading, maintenance of reserve requirements and resource mobilization from other banks and financial institutions. The Corporate/Wholesale Banking segment includes lending, deposit taking and other services offered to corporate customers. The Retail Banking segment includes lending, deposit taking and other services offered to retail customers. The Other Banking Operations segment includes para banking activities like third party product distribution, merchant banking. The Bank has approximately 200 branches and approximately 410 automated teller machine (ATM) centers.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.