DCB bank says slower pace of expansion will keep costs in check

MUMBAI (Reuters) - Plans by India's DCB Bank to spread expansion of its branch network over a longer time horizon will rein in costs, the company said on Friday after its growth strategy raised investor concern over profitability.

The bank had unveiled an ambitious plan this month to double its branches to 300 within a year in an effort to tackle increased competition for customer deposits in India.

The company then scaled back its plans -- to 150 new branches over two years -- after investors dumped its shares.

Shares in the company are down 36.9 percent since the announcement.

On Friday DCB said it expects the slower pace of expansion to allow it to double its balance sheet in 33-36 months, adding that it expects to maintain a return on equity ratio of about 14 percent by the end of its 2019 financial year.

 

(Reporting by Himank Sharma; Editing by David Goodman)