The city-based small-sized lender Development Credit Bank (DCB) today said it expects 25% growth in advances this fiscal, buoyed by a healthy 29% uptick in credit demand in the first quarter.
"We are targeting a 20-25% growth in advances in the rest of the fiscal. We are cautiously optimistic about achieving this target, though the economy is not in the pink of health," DCB managing director and chief executive Murli M Natarajan told PTI.
Natarajan further said, the bank has no plan to raise additional capital this year as it is well-capitalised with an overall capital adequacy standing at 14.49%.
Since the bank has turned profitable last fiscal, the focus is on giving at least 14-15% return on equity to the promoters, the Aga Khan Foundation, he added.
Going forward, the bank will continue to focus on retail and non-resident deposits, while lending focus will be continue to be SMEs and retail.
During first quarter, DCB saw its net profit more than double to Rs 18.9 crore from Rs 8.8 crore a year ago on the back of a healthy 29% growth in advances to Rs 5,449.1 crore while deposits grew by 14% to Rs 6,829.4 crore.
Its loan book comprises 33% mortgage loan, 27% in MSME advances, 23% corporate loans and 13% agri and inclusive banking.
Natarajan said as much 83% of its deposits are retail, which is a tad lower than year, when it stood at 85%.
During the quarter, the bank's gross NPA came down to 41.8% from 5.9%, while the net NPA stood at 0.75% and the provision coverage stood at 88.5%.
DCB, which is not a member of the CDR Cell -- it came out the cell a few years back -- had restructured loans worth Rs 10 crore from four accounts, Natarajan said.
DCB has 86 branches in 13 states and two Union Territories and Natarajan said the bank has no plan to aggressively expand either its branches or its ATMs.
DCB was set up in the 1930s by the Aga Khan Fund for Economic Development & Platinum Jubilee Investments, which holds over 19% stake. The Fund is active in 16 countries, including Diamond Trust Bank in Kenya and was one of the co-promoters of the now mortgage major HDFC in the late 70s.
