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Informist, Friday, Jul. 24, 2026

 

By Janwee Prajapati

 

MUMBAI – DCB Bank Ltd. posted a double-digit increase in net profit for the June quarter, largely on the back of a sharp decline in provisions and contingencies. The bottom line grew both on year and sequentially, supported by higher total income driven by an uptick in interest income. However, the increase in net profit was limited by a rise in tax expenses and overall operating costs.

 

The private-sector bank's net profit rose nearly 36% on year to INR 2.13 billion in the June quarter. The bottom line rose almost 4% sequentially. Analysts had estimated the private-sector bank's net profit for the quarter at INR 1.95 billion, up 24% on year but down 5% on quarter.

 

The bank's total income was INR 21.81 billion, up over 6% on year and nearly 3% on quarter. The private-sector bank reported net interest income of INR 6.84 billion, up 18% on year.

 

DCB Bank's profit got a boost from a sharp drop in provisions and contingencies, which fell more than 50% on year to INR 570 million. Provisions and contingencies fell over 17% sequentially. The lender's provision coverage ratio stood at 79.81% for the June quarter. The ratio reflects the share of bad loans covered by funds set aside from profits.

 

Asset quality also improved in the first quarter of the financial year 2026-27 (Apr-Mar). As of Jun. 30, the bank's gross non-performing asset ratio was 2.43% and the net non-performing asset ratio was 0.84%, down from 2.45% and 0.89%, respectively, in the March quarter.

 

Interest income accounted for the bulk of the bank's total income, rising over 9% on year to INR 19.84 billion. However, growth in total income was limited by a decline in other income, which forms about 9% of total income. Other income fell to INR 1.96 billion in the June quarter, down nearly 17% on year and over 7% sequentially.

 

On the expenses side, the bank's total expenditure rose nearly 7% on year to INR 18.37 billion. Operating expenses were the biggest contributor, climbing almost 10% on year to INR 5.36 billion. Other operating expenses, which accounted for about 43% of total operating expenses, increased nearly 15% on year.

 

The bank reported a net interest income of INR 6.84 billion for the June quarter, up from INR 5.81 billion for the year-ago quarter. On Jun. 30, the bank's Basel-III capital adequacy ratio stood at 17.03%. Its net interest margin stood at 3.35%, up from 3.20% a year ago but down from 3.39% in the trailing quarter. Its current account savings account ratio stood at 21.65% in the first quarter of FY27.

 

Total deposits with the private-sector lender were up over 20% on year at INR 744.82 billion while advances were up over 17% at INR 599.51 billion in the reporting quarter. Cost of deposits for the bank fell to 6.71% from 6.84% a quarter ago. Cost of funds was also down at 6.75% from 6.89% in the previous quarter. The yield on advances was down as well at 10.75% from 10.98% in the March quarter. Credit costs stood at 0.26% in the reporting quarter. The cost-to-income ratio for the bank was 60.92%.

 

The bank aims to keep its gross non-performing asset ratio below 2.50% and net non-performing asset ratio at 1%. The bank has a target cost-to-income ratio of up to 60% with a target cost-to-average assets of 2.50-2.60%. Friday, its shares closed at INR 186.24 on the National Stock Exchange, down 1.8% from Thursday. The bank announced its earnings after market hours.  End

 

Edited by Rajeev Pai

 

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