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Informist, Friday, Jul. 24, 2026

 

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--DCB Bank: Yield on advances driven by gold products in Q1 
--CONTEXT: Comments by DCB Bank management in post-earnings analyst concall 
--DCB Bank: See higher yields in coming quarters on back of better loan-mix 
--DCB Bank: Do not see co-lending portfolio exceeding 15% of total advances 
--DCB Bank: See improvement in cost-to-average-assets ratio ahead 
--DCB Bank: Aim to improve net interest margin via better share of mortgages 
--DCB Bank: May add 20 branches to end year with around 500 
--DCB Bank: See improvement in asset disbursal Q2, Apr-Jun usually lukewarm 
 

 

By Shakshi Jain and Upasika Singhal

 

MUMBAI – DCB Bank Ltd. expects net interest margin to improve in the coming quarters on the back of an improvement in yield on advances, the bank's management said at a post-earnings call with analysts. The bank expects yields on loans to benefit from a better product mix, led by a rise in mortgage loans. Gold loans were the major drivers in the June quarter, leading to a comparatively lower yield, substantially lower cost, and a fairly minimal credit cost, the management said.

 

Mortgage disbursements have already started improving, despite the expected lull in the June qaurter, and will continue to improve through the financial year, said the senior management. The bank will maintain the strategy of bringing down cost of deposits, keeping the portfolio quality momentum going and changing the product mix to have more mortgage loans to improve net interest margins. 

 

On co-lending, the bank said that the portfolio will remain within its internal ceiling of 15% of total advances. While the bank has room to expand, it prefers organic lending improvement with co-lending portfolio being somewhere in the 13-14% range instead of being one of the largest drivers for growth.

 

The bank expects improvements in its cost-to-average-assets ratio after bringing it below the guidance of 2.5%. However, the gains made through this efficiency will be offset by planned hiring and incremental staff salary in the June quarter. The management said it will increase its workforce from 1,500 to 13,000 eventually, to increase the bank's sales volume. Nevertheless, the bank expects to remain below the cost guidance for the full year.

 

DCB Bank plans to add around 20 branches during the current financial year, taking its network to around 500 branches by the end of the year, senior management said. Expansion will largely focus on increasing branch presence in cities where their bank has done well rather than entering new areas.

 

The bank said it remained well-capitalised, with Tier 1 capital increasing to 14.9% from 14.26% three months ago and overall capital adequacy improving to 17.03%. The management said there was no urgency to raise capital but the bank was evaluating options to fund its next phase of growth. Shareholders have approved an enabling resolution to raise INR 20 billion, including INR 15 billion for Tier 1 capital. However the timing, size and pricing of the capital will be decided by the board.  End

 

Edited by Akul Nishant Akhoury

 

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