DCB Bank Ltd. share price target

DCB reported advance degrowth of 0.37% for Q4FY20 on a QOQ basis while deposits registered a QOQ growth of 2.14%, even though Q4 usually has historically been the strongest quarter for the bank. NIMS for the quarter stood at 3.64% against 3.71% in Q3FY20. GNPA's stood at 2.46% against 2.20% in Q3FY20 while NNPA stood at 1.16% against 1.03% in Q3FY20. The provision coverage ratio was at 70.81% against 76.99% in Q3FY20. Advances growth to pick up pace from Q3FY21 as COVID induced pain eases and the economy returns to normalcy. GNPA's increase - upgrades delayed On a QOQ basis GNPA'S registered an increase of INR 795 mn as upgrades were affected by the lockdown. Within GNPA's the highest...

DCB Bank reported an operationally steady quarter but with higher provision at | 63 crore related to Covid impacted earnings. Provision surged 240% YoY to | 118 crore, including Covid related provisioning of | 63 crore vs. RBI requirement of | 9 crore. The bank has maintained additional floating...

DCB Bank's (DCBB) Q4FY20 PAT at Rs 0.7bn declined 29% YoY on slower NII growth (8%) and a spike in provisions.

Our estimates remain largely unchanged, even after DCBB's soft performance over 3QFY20. We model a considerable improvement in credit growth and operating efficiency beyond FY20E. These reflect our confidence in the bank's calibrated approach to growth. We expect oplev to be the biggest driver of return ratio improvement. DCBB stands to gain from an uptick in economic activity and a sustained downturn will pose a significant risk to our estimates. DCBB reported an in-line qtr and overall performance was lackluster (asset quality deterioration and slowing growth). Better cost control and a slight margin uptick were positives. MAINTAIN BUY with a TP of Rs 249.

Background: DCB Bank Limited (formerly Development Credit Bank Limited) has a deposit base of INR 297bn and advances of INR 254bn at the end of 3QFY20, making it the smallest bank in the listed private sector space, including both new and old generation private sector banks. Promoter group the Aga Khan Fund for Economic Development (AKFED) & Platinum Jubilee Investments holds ~15% stake. DCB services entail Corporate Banking - 12%, SME -11%, Agriculture 21%,...

DCB Bank's net advances growth moderated further to 11% vs 12% sequentially. NII grew by 10% YoY while PAT grew by 12% YoY led by lower tax rate (26% vs 35% YoY). Loan growth ex-corporate segment is ~15% (16% in Q2FY20) vs. overall growth of 11%. Cost-toincome ratio on a QoQ basis has declined by 85bps on account of stable Opex sequentially. Fresh slippages continue to remain high at 2.01bn up 25% QoQ led by Corporate and CV...

25 January 2020 DCBB reported in-line 3QFY20 operating performance, while higher provisions dragged earnings growth (5% miss), led by greater stress in a few business segments. Loan growth moderated further on continued sluggishness in the corporate banking portfolio. Maintain DCBB reported PAT of INR967m (5% miss), impacted by lower treasury gains and higher provisions (36% QoQ increase). NII growth slowed to 10% YoY to INR3.2b (in-line) due to moderation in loan growth (11% YoY) while margins improved 4bp QoQ to 3.71%, aided by reduction in cost of deposits. Other income declined 1.5% YoY (8% QoQ decline), mainly led by muted treasury gains of INR70m (72% QoQ decline), while core fee growth was also subdued at 5% YoY. Loan growth moderated further to 11% YoY, primarily led by continued sluggishness in the corporate banking portfolio; it now forms 12% of the book (v/s 15% in 3QFY19).

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Sector: Banking /Mid-Cap | Earnings Update 2QFY20 Background: DCB Bank Limited (formerly Development Credit Bank Limited) has a deposit base of INR 293bn and advances of INR 248bn at the end of 2QFY20, making it the smallest bank in the listed private sector space, including both new and old generation private sector banks. Promoter group the Aga Khan Fund for Economic Development (AKFED) & Platinum Jubilee Investments holds ~15% stake. DCB services entail Corporate Banking - 12%, SME -12%, Agriculture 20%, Mortgages 41%....

DCB Bank's net advances growth moderated further to 12% vs 13% sequentially. NII grew by 11% YoY while PAT grew by 24% YoY led by higher other income (up 38% YoY). Loan growth ex-corporate segment is ~16% (19% in Q1FY20) vs. overall growth of 12%. Cost-to-income ratio on a QoQ basis has declined by 195bps on account of stable Opex sequentially. Fresh slippages continue to remain high at 1.6bn up 10% QoQ led by Mortgages/SME and CV portfolio. We maintain ACCUMULATE rating with a new TP of...