Federal Bank, DCB profit up on loan growth
DCB Bank reported a 23% increase in net profit year on year led by a strong growth in net interest income even as asset quality remained stable.
The bank earned a net interest income (NII) of Rs 899 crore up 24% year-on-year while net interest margin for the quarter stood at 3.31% little changed from the 3.32% recorded last year.
Net NPA eased slightly to 1.32% this year versus 1.61% recorded a year earlier as a result of which provisions remained stable at Rs 177 crore from Rs 168 crore a year earlier.
“This is seventh consecutive quarter in which the operating profit of the bank has increased which shows the underlying strength of the bank. Even between the first and the second quarters this year, each of our businesses grew by 5% to 6%. In the last six quarter we have cornered 1.04% of the credit market in India which is higher than the 84 basis points six quarters ago,” said Federal Bank CEO, Shyam Srinivasan.
Another private sector lender DCB Bank also reported a 23% increase in net profit year on year led by a strong growth in net interest income even as asset quality remained stable.
Net profit increased to Rs 59 crore or Rs 1.87 per share from Rs 48 crore or Rs 1.68 per share a year ago. Net NPA remained stable at 0.90% compared to 0.84% a year ago. CEO Murali Natrajan however warned that the bank has to remain vigilant on asset quality.
“There is stress building up in the SME sector for various reasons like GST and demonetisation and 85% of our loans are linked to this sector. So we have to be vigilant and use all the early warning systems at our disposal to prevent fresh stress,” Natrajan said.