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BW Businessworld

A Small Little Gem

DCB Bank continued to buck the trend; and is among the pack-leaders

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DCB Bank continues to shine among the small private banks in the country. It does not deviate from its plot of servicing the small and the needy, even as it eyes some of the larger corporates. In the 10th edition of the BW Businessworld Best Banks Survey, DCB Bank has won the runner-up spot in the ‘Fastest Growing Small-sized Bank’ category; it was a joint-winner in our survey last year, sharing the spot with City Union Bank.

Operating profit was up 20 per cent at Rs 418 crore; profit before tax up 17 per cent at  Rs 307 crore, with net profit up 3 per cent at Rs 200 crore. Net advances grew 22 per cent to Rs 15,818 crore. Its deposits grew 29 per cent to Rs 19,289 crore; current and savings accounts were up at 24.31 per cent (23.38 per cent). Its balance-sheet grew 26 per cent to Rs 24,046 crore.

Despite all-round pressures in the system, the bank managed to keep non-performing assets (NPA) on a leash; it was much better compared to some of its competitors. The gross NPA ratio stood at 1.59 per cent (1.51 per cent), and net NPAs at 0.79 per cent (0.75 per cent). Look no further than the fact that at end-March ’17, the net restructured standard advances was approximately at Rs 36 crore (or 0.23 per cent of net advances) spread across a mere three accounts.

Says managing director and CEO Murali M. Natrajan: “The emphasis is on building a secured advances portfolio and long-term relationships with high-quality large and mid-corporate houses. Regular review of the existing exposure is done with the aim of initiating timely action in case of any emerging risks. In fiscal ’17, we had some slippages into NPA, primarily on account of economic stress in some sectors. As a result of the early warning systems in place and timely management of risky exposures, the corporate banking portfolio quality remained stable.”

DCB Bank’s target market is mainly small business owners, the self-employed and the small business segment (traders, shop keepers, business owners, micro, small and medium enterprises). It has chosen to have limited presence in the salaried segment.

“We have completed almost 70 per cent of the 150 new branches roll out plan announced in October 2015 and our branch network will cross 300,” adds Natrajan. In fiscal ’17, the branch network was up by 64 branches: 30 in retail and 34 in agri and inclusive banking (AIB). The year ended with 262 branches (150 in retail and 112 in AIB) in 18 states and two union territories. Approximately 22 per cent of the branches are in rural areas and 25 per cent in semi-urban areas. Based on the business model adopted by the bank, new branches generally “break-even” between 18 to 22 months from the date of operation.

Keep an eye on DCB Bank.