Strategies of DCB Bank
By J Abinaya Infanta
Overview of the Bank:
DCB Bank- at a glance:
* DCB Bank Limited (formerly Development Credit Bank Ltd. ) is a modern emerging new generation private sector Bank. Present since 1930s DCB is the only co-operative bank in India to have been converted into a private sector commercial bank in 1995.
* Strong presence in Andhra Pradesh, Gujarat and Maharashtra resulting in sticky customer deposits from traditional customers. New branch expansions in Madhya Pradesh, Odisha, Punjab Rajasthan.
* Distribution network of 130 branches across 80 locations and 238 ATMs
Comprehensive product range & scalable infrastructure :
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Coverage ratio of 79.64% as on September 30, 2010
* Reduction in cost base
* Implementation of new business strategy resulting in steady balance sheet growth
* Launch of new deposit products
* Increase in CASA and retail term deposits to lower cost of funds and improve NIMs
* Rating upgrades
* Strengthening of Credit, Operations and Internal Audit
* Leaner organization structure, improvement in staff morale and retention
* Raising of Tier I (INR 810 mn) and Tier II (INR 650 mn) capital in FY10 to support growth in advances
* Grow Retail, micro SME, SME, mid- Corporate and Agri / Microfinance with a “customer centric approach”. Concentrate on secured lending & diversified portfolio
* Treasury – Liquidity management, opportunity for gains within acceptable risks
* Relentless focus on Costs / Income Ratio and Service
* Stringent mechanism for managing Credit and Operational risks
* Continuously improve people quality and delivery
* Retail – branch centric
* Low cost deposits (CASA / Term)
* Secured lending (Home loans, Loan against property, Loan Against Term
* Deposit (LATD)
* Micro SME
* Traditional customer base
* Third party fee income
Comparison of Q3 FY 2013-14 vs Q3 FY 2012-13
(a) Profit After Tax (PAT) for the quarter at Rs. 36.36 crores was 35% higher than PAT of Rs. 26.91 crores in Q3 FY 2012-13.
(b) Total Income grew to Rs. 126.81 crores which was 26% increase over Rs. 100.92 crores earned in corresponding quarter of previous year.
(c) Over the same period, Net Interest Income grew by 31% to Rs. 93.97 crores from Rs. 72.00 crores.
(d) Non Interest Income for the quarter was Rs. 32.84 crores which was 14% higher than Rs. 28.92 crores earned in Q3 FY 2012-13. Within this, Commission, Exchange and Brokerage (Core Fee Income) grew by 20% to Rs. 26.66 crores as against Rs. 22.22 crores earned last year.
(e) Operating Cost for the quarter was Rs. 80.45 crores as compared to Rs. 69.15 crores in corresponding quarter of previous year, growth of 16% after accommodating branch growth to 115 branches as compared to 89 branches as at December 31, 2012.
(f) GNPA (Gross Non Performing Assets) ratio has reduced to 2.77% from 3.80% as at end of Q3 FY 2012-13 and over the same period, NNPA (Net Non Performing Assets) Ratio has remained steady at 0.77% as compared to 0.74%.
(g) Advances have grown by 23% to Rs. 7,361 crores as compared to Rs. 5,964 crores as at December 31, 2012.
(h) Deposits have grown by 27% to reach Rs. 9,592 crores from Rs. 7,558 crores as at end of Q3 FY 2012-13. Within this, NRI Deposits have grown by 63% to reach Rs.739 crores from Rs.454 crores as at end December 31, 2012.
(i) NIMs for the current quarter are at 3.55% as compared to 3.38% in corresponding quarter of FY 2012-13.
(j) CASA ratio was 24.80% as compared to 28.87% as end December 31, 2012.
(k) On an annualized basis, ROA has improved...