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DCB Bank announces Full Year FY 2022 Results


DCB Bank announces Full Year FY 2022 Results May 07, 2022, Mumbai: The Board of Directors of DCB Bank Ltd. (BSE: 532772; NSE: DCB) at its meeting in Mumbai on May 07, 2022, took on record the audited financial results of the Fourth Quarter (Q4 FY 2022) and the Year ended March 31, 2022 (FY 2022). Highlights: 1) Profit After Tax The Bank’s Profit After Tax (PAT) for Q4 FY 2022 was at INR 113 Cr. In comparison Profit After Tax for Q4 FY 2021 wasat INR 78 Cr., growth of 46%. PAT wasat INR 288 Cr. in FY 2022 as against INR 336 Cr. in FY 2021. 2) Operating Profit The Operating Profit for Q4 FY 2022 was INR 221 Cr. as against INR 201 Cr. for Q4 FY 2021. Operating Profit for FY 2022 was INR 797 Cr., as against INR 886 Cr. for the same period last year. FY 2021 had the benefit of much higher one-time Treasury Income due to favorable interest rate movements. 3) Net Interest Income The Bank earned Net Interest Income of INR 380 Cr. for Q4 FY 2022 as against INR 311 Cr. for Q4 FY 2021. Net Interest Income in FY 2022 was INR 1,358 Cr. as against INR 1,287 Cr. In Q4 FY 2022, Net Interest Margin (NIM) was at 3.93% as against3.46% in Q4 FY 2021. NIM wasat 3.56% in FY 2022 asagainst 3.59% in FY 2021. 4) Non-Interest Income In FY 2022, Non-Interest Income (Fee) was at INR 452 Cr. as against INR 446 Cr. for the same period. As mentioned above, FY 2021 had the benefit of much higher one-time TreasuryIncome due to favorableinterest rate movements.


5) Cost Income Ratio Cost Income Ratio (CI) for FY 2022 was at 55.96% as compared to 48.87% in FY 2021. As the COVID-19pandemic appears to be recedingopening business opportunities in the chosen self-employed segment, the Bank is continuing to increaseits frontline headcount / capacity to step-up growth in the coming months. As the Bank is predominantly in the small ticket secured Retail and SME/MSME business, headcount / capacity increase, initially impacts CI ratio. If the business volume increases as planned,then CI ratiois expected to decline over time. 6) Return on Equity Return on Equity (ROE) (Annualized) was at 12.12% in Q4 FY 2022 as comparedto 8.96% in Q4 FY 2021. ROE was at 7.92% in FY 2022 ascompared to 9.99% in FY 2021. 7) Dividend The Board of Directors have recommended a dividend of INR 1 per share @ 10% forthe year ended March 31, 2022 subject to approval of the members in the ensuing Annual General Meeting. 8) Capital Adequacy Capital Adequacy continues to be strong and as on March 31, 2022, the Capital Adequacy Ratio was at 18.92% (with Tier I at 15.84% and Tier II at 3.08% as per Basel III norms). 9) Deposits The Bank has been steadily growing the Retail Term Deposits (less than INR 2 crores) and reducing Bulk Deposits. As on March 31, 2022, the top 20 deposits ratio was at 6.31%. In FY 2022, the Bank achieved CASA growth of 37% over the previousyear. CASA Ratio was at 26.75% as on March 31, 2022, as against 22.85% as on March 31, 2021. 10) Advances The main target market of the Bank is MSME/SME segment.In terms of products, the Bank is focused on growing Home Loans, Business Loans (LAP), Gold Loans,MSME/SME (CC/OD/Term), KCC (Kisan Credit Card), Tractor Loans, Loans to MFIs and MFI-BC Loans. In FY 2022, the Bank also embarked on lending in TReDS platform and Gold Loans through Co-lending partnership. In Corporate segment, the Bank continues to cautiously target short term loans.


As on March 31, 2022, Net Advances was at INR 29,096 Cr. A 13% growth as compared to the previous year. In Q4 FY 2022, the Bank disbursed INR 5,043 Cr. (Mortgage INR 1,115 Cr., Gold Loans INR 309 Cr., Agri & Inclusive Banking INR 782 Cr., MSME/SME INR 112 Cr., Construction Finance INR 244 Cr., Commercial Vehicle INR 24 Cr., Corporate Banking INR 503 Cr., Co-Lending INR 1,954 Cr.) 11) Refinance Bank Refinance (NABARD, NHB and SIDBI) was at INR 3,477 Cr. as on March 31, 2022. Given the granular nature of Advances, the Bank’s portfolio is eligible to continue to seek long term refinance options from SIDBI, NABARD and NHB periodically. 12) Liquidity The average LCR for Q4 FY 2022 was 125.33%. On a conservative approach, the Bank had maintained daily liquidity at levels higher than “business as usual”. However, as situation is improving, the Bank is slowly moderating the excess liquidity. 13) Costs Costs are increasing on account of (a) Increase in frontline headcount (b) Salary increase (c) New branch additions (d) Technology investments. This may result in near term increase in Cost / Income ratio. Both Cost / Income ratio and Cost to Average Assets are expected to steadily decline over time with increase in businessvolumes. 14) Provisions As on March 31, 2022, the Bank is holding the following provisions: ItemINR Cr.Provision for GrossNPA595Floating Provision122a. Sub Total717Specific Standard AssetsProvision29Contingency Provision on Restructured and Stressed Assets70Restructured Standard Assets287b. Sub Total386Standard Assets Provisions (as required by RBI guidelines)94c. Sub Total94Total – a + b + c1,197


15) Asset Quality The Gross NPA as on March 31, 2022 was at 4.32% as compared to 4.78% in December 31, 2021. The Net NPA was at 1.97% as on March 31, 2022 as compared to 2.55% in December 31,2021. As the Bank has mostly secured portfolio, as environment improves,the Bank continuesto have strong performance in Recoveries and Upgrades. In Q4 FY 2022 while NPA slippages was INR 378 Cr., Recoveries and Upgrades were INR 426 Cr. or 113%. The month-on-month slippages excluding Gold Loans have steadily declined and are nearly back to pre-Covid-19 levels. We continue to improve on Collections, Recoveries and Upgrades. The Provision Coverage Ratio (PCR) as on March 31, 2022 was at 67.84% and PCR without considering Gold Loans NPAs was at 72.49%. 16) Collections Efficiency (%) Business Loans (LAP): Customers (including delinquent & restructured) who have not paid any installment from April 1, 2020, to March 31, 2022, was at0.59%. The percentage of portfolio who have paid 3 EMIs or more from April 01, 2020, to March 31, 2022, stood at 98.5%. Home Loans: Customers (including delinquent & restructured) who have not paid any installment from April 1, 2020,to March 31, 2022, was at 1.53%.


The percentage of portfolio who have paid 3 EMIs or more from April 01, 2020, to March 31, 2022, stood at 94.6%. Commercial Vehicle: Customers (including delinquent & restructured) who have not paid any installment from April 1, 2020, to March 31, 2022, was at 2.83%. The percentage of portfolio who have paid 3 EMIs or more from April 01, 2020, to March 31, 2022, stood at 95.4%. 17) Credit Costs While relentlessly focusingon Collections, Recoveries and Upgrades the Bank is likely to make provisions on a conservative basis. 18) ECLGS Under ECLGS the Bank has so far disbursed INR 1,285 Cr. (15,002 customers). 19) Restructure Unlike Covid-19 first wave, the unanticipated severity of the second wave drove More customers to seek restructure as their business / livelihood was impacted. The Bank had followed a cautious approach to restructure requests from customers. As on March 31, 2022, the Net Restructured Standard Advances including Covid-19 relief stood at INR 1,869 Cr. mostly contributed by Mortgages, Commercial Vehicles and SME / MSME. 20) Branch Network The Bank’s branch network stood at 400 as on March 31, 2022.The Bank intends to add 25-35 branches in the next 12-15 months. The pace of branch expansion will depend interalia upon businessopportunities and performance. 21) Headcount The Bank’s headcount was 8,077 as on March 31, 2022 (6,432 as on March 31, 2021 and 6,845 as on March 31, 2020). The Bank plans to continue to increase its frontline headcount to build capacity for growth. 22) Accelerating Digital Agenda The Bank has embarked upon accelerating the digital agenda with the intention of vastly improving customer journey / service quality and reducing costs as part ofstrategic cost management. The Bank has identified 852 digital projects (105 – Large, 465 – Medium and 282 – Small) of which 275 projects have already been completed.


Speaking on the FY 2022 results Mr. Murali M. Natrajan, Managing Director & CEO said, “Monthly NPA Slippagesare steadily declining, while Recoveries and Upgrades continueto be strong. Business volumesare increasing, and our intentionis to build further momentum

while utilizing the increased frontlinecapacity. During the quarter the Bank crossedan

important milestoneof 400 branches”.

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