SME is the key segment of the bank. The target segment is customers from semi-urban India having a monthly income of Rs 50,000 per month. The customers include retail traders, Kirana shops and people from the informal salaried segment.
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Nirmal Bang Report
We met with the management of DCB Bank Ltd. in order to have a better understanding of the bank's business model and its growth outlook ahead.
Key takeaways of the meeting:
Loan growth guidance maintained at 18- 20%, with focus on SME segment. In terms of products, the growth drivers will be overdraft, home loans, KCC, tractors, construction finance, educational institutions and mortgages.
If the rate cuts by RBI happen sooner, then it can lead to net interest margin compression in the near term and if the rate cuts happen in the later part of the year then it will be positive for the margins.
The cost to average assets ratio is targeted at 2.5% in FY26.
Gross non-performing asset is targeted to come below 2.5% and net-non performing asset at 1%.
RoEs are expected to be in the range of 13-15%.
The bank will raise capital at an opportune time in future.
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