Development Credit Bank (DCB) on Wednesday said its net profit for the fourth quarter (January-March) of 2010-11 was Rs 11.35 crore, as it had made lower provisioning on the back of improving asset quality. The bank had reported a net loss of Rs 8.2 crore in the corresponding period last year.
Net interest income, the difference between interest income and interest expense, expanded 19 per cent from a year ago to Rs 50 crore during the quarter. Net interest margin during the three-month period was at 3.15 per cent, down 12 basis points from a year earlier.
The bank made provisioning for Rs 11 crore, compared to Rs 27 crore a year earlier. The gross non-performing asset ratio improved 283 basis points year-on-year, to 5.86 per cent as on March-end. The Net bad loan ratio was 0.97 per cent, down 214 basis points from a year ago. Provision coverage ratio was 87.7 per cent, above the Reserve Bank of India’s mandate of minimum 70 per cent.
“The progress made so far is the result of careful execution of our new strategy and approach. We are confident of making steady progress in the coming years,” Managing Director and Chief Executive Murali M Natrajan said in a statement.
This was also the first time in the past three years that DCB reported a net profit for a 12-month period. The profit after tax was Rs 21.4 crore in 2010-11 (April-March). Net interest margin for the year was at 3.13 per cent.
“We have been able to deliver modest profits after two difficult years. We will aim for a higher growth rate once we fully stabilise the bank and further strengthens its foundations,” DCB Chairman Nasser Munjee said.
In 2010-11, DCB’s advances grew 24 per cent to Rs 4,271 crore, while deposits rose 17 per cent to Rs 5,610 crore. The share of low-cost current account/ savings account deposits was at 35.2 per cent of total deposits as of March-end.
The capital adequacy ratio was 13.25 per cent, with Tier-I at 11.1 per cent and Tier-II at 2.15 under the Basel-II measure.
