DBS Bank India FY21 nearly triples to Rs 312 cr, revenue up 85%

Asset quality under pressure on LVB acquisition

DBS Bank India Ltd's (DBIL) net profit rose to Rs 312 crore for the year ended March 2021 (FY21), up from Rs 111 crore in FY20. This rise in net profit is despite the impact of acquisition of ailing private lender Lakshmi Vilas Bank (LBB) in FY21.

DBIL, subsidiary of Singapore-based DBS, had acquired LVB in FY21. The bank adopted the concessional tax regime, resulting in an additional charge of Rs 184 crore on account of one-time adjustments.

The revenues for DBIL grew by 85 per cent to Rs 2,673 crore, including Rs 134 crore from LVB, in FY2021 from Rs 1,444 crore in FY2020.

The asset quality profile came under pressure and gross non-performing assets (NPAs) rose to 12.93 per cent after the amalgamation of LVB in FY21 from 2.6 per cent in March 2020. The net NPA stood rose to 2.83 per cent in March 2021 at 0.47 per cent in March 2020. The provision coverage ratio was 84 per cent at end of March 2021.

The net advances grew to Rs 36,973 crore (including Rs 10,685 crore from LVB) by March 2021 from Rs 19,131 crore a year ago.

The total deposits were up 44 per cent to Rs 51,501 crore, including Rs 18,823 crore with LVB. The share of low-cost money--Current Account plus Savings Account (CASA)--improved to 31 per cent in March 2021 from 19 per cent a year ago.

The bank said in a statement that the integration of operating platforms and branches is currently underway. The steady growth in LVB current and savings account balances as well as in the gold loans portfolio in 2021 is an early indicator of the success of the current strategy.

There has been an immediate impact on our financial results due to the high Net NPAs and operating losses at LVB. However, the bank is confident of realising the long-term prospects of the combined franchise, said Surojit Shome, Managing Director and CEO, DBS Bank India.

The Capital Adequacy Ratio (CAR) stood at 15.13 per cent, with Common Equity Tier-1 at 12.34 per cent. During the year, DBS Bank infused Rs 2,500 crore into DBIL to support the amalgamation.