MOSL: DCB BANK (Neutral)-Strong operating profit, lower provisions aid YoY PAT growth
​DCB Bank: Strong operating profit, lower provisions aid YoY PAT growth
(DCBB IN, Mkt Cap USD0.8b, CMP INR184, TP INR197, 7% Upside, Neutral)
- PPoP growth stood at -9%/+23% QoQ/YoY (in-line), driven by NII beat of 5% (incl. INR72m of interest on IT refund). Other income grew -24%/6% QoQ/YoY to INR3.1b (10% miss), as 1QFY18 had lumpy treasury income of INR214m, leading to total income growth of 24% YoY (-1.7% QoQ).
- Opex growth of 25% YoY exceeded total income growth of 24%, reversing falling CI ratio (60.3%, +300bp QoQ) trend of past few quarters. Provisions at INR302m (+14% YoY, 4% miss) led to PAT growth of 21% YoY (7% miss).
- Loan book grew 7%/21% QoQ/YoY to INR173b, led by strong growth in AIB (+21% YoY), MSME (+31% YoY) and corporate book (+28% YoY), while other categories such as CV/CE (+51% YoY) and gold (+21% YoY) also showed strong growth. Corporate book inched up to 17% of loans.
- Absolute GNPA/NNPA grew to INR3.2b/INR1.6b (+11%/+5% QoQ), driven by 16%/10% sequential growth in mortgage/AIB GNPA (INR1.16b/INR561m). Overall slippages moderated to 2.2%, compared to 2.7% in 1Q. In percentage terms, GNPA/NNPA came in at 1.8%/0.9% (+6bp/-2bp QoQ).
- Other highlights: a) CASA ratio declined ~100bp to 26% v/s 27% in 1Q. b) Management expects GST-related issues with MSMEs to iron out gradually. c) LAP growth has been impacted by redefined credit risk parameters, balance transfer by HFCs and a reduction in the ticket size.
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.