DCB buys Rs 220 cr retail loan asset from ICICI Bank

Development Credit Bank (DCB) has bought home and personal loan portfolio aggregating Rs 220 crore from ICICI Bank. With this buyout, the bank's retail asset base has shot up by 169 per cent to Rs 350 crore from the current Rs 130 crore.

By March 2005, the bank plans to increase its total retail asset base to Rs 750 crore. ICICI Bank, the country's largest private sector bank, initiated the process of selling down its assets, which created a new market for asset-backed securitised paper. It proposes to securitise Rs 10,000 crore worth of loans in the fiscal 2005.

Besides originating business, DCB is keen on buying retail assets from financial intermediaries in order to grow its asset base, said Sandeep Mookherjee, head-personal financial services, Development Credit Bank. The bank is also in talks with some non-banking finance companies (NBFC) to buy out their auto loan portfolio, he added. In order to grow its market share in the retail space, DCB has set up 8 retail asset centres across the country.

Mookherjee said the bank, which currently has 67 branches spread across Maharashtra, Gujarat, Andhra Pradesh and Goa, is in the process of expanding its network. The bank will open 12 new branches in the latter half of this fiscal. It plans to introduce internet banking in August. DCB's total deposits as on March 31, 2004, stood at Rs 4,500 crore against Rs 3,657.09 crore in the corresponding period last fiscal. Total advances of the banks stood at Rs 2,500 crore against Rs 2,488.37 crore in March 2003.

Capital adequacy of the bank as on March 31, 2004, stood at around 14 per cent as against 10.08 per cent in the preceding year. DCB's net non performing assets (NPA) as on March 31, 2004, dipped below five per cent to 4.7 per cent against 7.76 per cent last year.