Private sector lender DCB Bank is aiming to double its loan and deposit book over the next 3-3.5 years, according to MD and CEO Praveen Kutty. As reported by The Hindu BusinessLine, the bank has grown 19% in assets and 20% on liabilities and plans to maintain this momentum. The bank's focus remains on the self-employed segment, with majority of deposits and loans coming from this customer base across India, except the North-East region.
DCB Bank continues to emphasize secured loans with collateral security from residential or commercial property and a sizeable gold loan book. According to the CEO's statements to The Hindu BusinessLine, the bank's ₹3-crore-plus loans form only 14% of advances, indicating a focus on smaller ticket sizes. The bank expects growth to continue from mortgages and gold loans, with gold prices climbing and increased demand for gold loans.
The bank's CASA ratio stands at upwards of 22%, with savings account rates ranging from 1.5% to 6.9%. As reported by The Hindu BusinessLine, DCB Bank has reduced cost of deposits by 10 bps to 6.86% and grown deposits by 19.5%. The bank's top 10 depositors now account for 6.61% of overall deposits, lower than in the past, indicating improved deposit franchise granularity.
DCB Bank maintains credit cost guidance of 45-55 bps range and reports that slippages have come down to a three-year low. According to the CEO's statements to The Hindu BusinessLine, GNPA and NNPA are at three-year plus low with upgrades as a percentage of fresh slippages rising to 86%. The bank expects slippages to remain stable going forward, supported by the resilience of its customer base in the self-employed segment.
The bank expects NIM to continue improving going ahead, with the full impact of the 25-bps repo cut not fully baked in during Q3. As reported by The Hindu BusinessLine, some of this impact will come in Q4, with the bank constantly comparing its peak retail term deposit rates with top three private and public sector banks. The gap between DCB Bank and competitors has narrowed from 89 bps in March to 60-65 bps currently.
