DCB Bank Q1 Review - Weak Operating Performance; Asset Quality Remains Under Pressure: Motilal Oswal
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Motilal Oswal Report
DCB Bank Ltd. reported a weak operating performance, affected by higher slippage, sluggish net interest income growth, and elevated provisions.
Net interest margins declined 15 basis points QoQ to 3.31%, impacted by high interest reversals and excess liquidity.
On the business front, DCB Bank's advances declined ~2% QoQ, while retail term deposit grew 17% YoY.
Asset quality deteriorated further, with the gross non performing asset/net non performing asset ratio increasing by 78 bp/53 bp QoQ to 4.87%/2.82%.
Provision coverage ratio moderated to 43.3% (versus 45.2% in FY21).
Also, the gross restructured book increased to Rs 13.7 billion (5.4% of loans) versus 4.3% of loans in FY21.
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