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ICICI Securities Report
DCB Bank Ltd.'s credit growth trajectory was impacted sharply during the past three years due to corporate book consolidation in FY19 and pandemic between FY20-FY22.
Credit growth decelerated to 7% compound annual growth rate during FY19-FY22 versus 24% CAGR through FY14-FY19.
Notably, despite the subdued growth in credit, profitability broadly remained stable as reflected in the average return on asset of 0.9% annually between FY19-FY22 (RoA was lowest at 0.7% in FY22).
However, profitability retraced in Q4 FY22 with RoA improving to 1.06% and sustaining in Q1 FY23 (0.9%). With RoA reaching near its historical high, we believe DCB Bank would now start focusing on accelerating credit growth.
Addition of ~2,000 people and more than 50 branches during past 12 months point at the bank's growth-oriented approach going forward.
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