DCB BANK 2023-24 Annual Report Analysis

Mon, 20 May

DCB BANK has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the bank during the year 2023-24.

DCB BANK Income Statement Analysis

• Interest income during the year rose 27.7% on a year-on-year (YoY) basis.
• Interest expenses were up by 38.3% YoY during the same period.
• Operating expenses increased by 14.8% YoY during the year.
• The bank's net interest income (NII) increased by 12.3% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 3.4% in FY24 as against 3.7% in FY23.
• Other income increased by 15.8% YoY during the year.
• Net profit for the year increased by 15.1% YoY.
• Net profit margins during the year declined to 10.0% in FY24 from 11.1% in FY23.

DCB BANK Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	42,003	53,620	27.7%
Other Income	Rs m	4,094	4,742	15.8%
Interest Expense	Rs m	24,833	34,341	38.3%
Net Interest Income	Rs m	17,170	19,279	12.3%
Operating Expense	Rs m	13,397	15,377	14.8%
Pre-provision Operating Profit	Rs m	7,867	8,644	9.9%
Provisions & Contingencies	Rs m	3,212	3,285	2.3%
Profit before tax	Rs m	6,276	7,220	15.0%
Tax	Rs m	1,620	1,860	14.8%
Profit after tax	Rs m	4,656	5,360	15.1%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	3.7	3.4
Net profit margin	%	11.1	10.0

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DCB BANK Balance Sheet Analysis

• The bank's deposits during FY24 stood at Rs 493.5 bn as compared to Rs 412.4 bn in FY23, thereby witnessing an increase of 19.7%.
• Advances for the year stood at Rs 409.2 bn as compared to Rs 343.8 bn during FY23, a rise of 19.0%.
• Cost of deposits for DCB BANK rose 15.2% and stood at 6.2%, while yield on advances rose to 10.4%.
• The lender's investments rose to Rs 162.1 bn during the year from Rs 125.8 bn in FY23.
• Borrowing stood at Rs 62.2 bn, a growth of 51.0% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 630.4 bn as against Rs 523.7 bn during FY23, thereby witnessing a rise of 20.4%.

DCB BANK Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	45,630	50,679	11.1%
Advances	Rs m	343,780	409,246	19.0%
Deposits	Rs m	412,389	493,530	19.7%
Yield on advances	%	9.9	10.4
Cost of Deposits	%	5.4	6.2
Investments	Rs m	125,825	162,108	28.8%
Borrowings	Rs m	41,181	62,195	51.0%
Total Assets	Rs m	523,659	630,370	20.4%

Current Valuations for DCB BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 17.1, an improvement from the EPS of Rs 14.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 131.9, stands at 7.7 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 0.8 times, while the price to income ratio stands at 0.8 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	134.8	171.4
Earnings per share (Unadj.)	Rs	14.9	17.1
Diluted earnings per share	Rs	14.9	17.1
Avg P/E ratio	Rs	7.0	7.7
Avg P/ABV ratio	Rs	0.8	0.8
Avg Market Cap	Rs	32,762	41,165
Dividends per share (Unadj.)	Rs	1.25	1.25

Ratio Analysis for DCB BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio deteriorated and stood at 82.9x during FY24, from 83.4x during FY23. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio increased and stood at 10.97x during FY24, from 9.94x during FY23. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): DCB BANK's capital adequacy ratio (CAR) was at 16.6% as on 31 March 2024 as compared to 17.6% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank improved and stood at 10.6% during FY24, from 10.2% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank deteriorated and stood at 0.85% during FY24, from 0.89% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 10.86% during FY24, from 10.51% during FY23. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. DCB BANK's gross NPA ratio stood at 3.2% as of 31 March 2024 compared to 3.2% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of DCB BANK was 1.1% in financial year 2024. This compared with 1.0% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	83.4	82.9
Debt to Equity Ratio	x	9.9	11.0
Loans / Deposits	x	0.1	0.1
Capital Adequacy Ratio	%	17.6	16.6
Return on Equity	%	10.2	10.6
Return on Assets	%	0.9	0.9
Return on Capital Employed	%	10.5	10.9
% of Gross NPAs	%	3.2	3.2
% of Net NPAs	%	1.0	1.1
Yield on Advances	x	9.9	10.4
Yield on Investments	x	5.7	6.7

To see how DCB BANK has performed over the last 5 years, please visit here.

DCB BANK Share Price Performance

Over the last one year, DCB BANK share price has moved up from Rs 114.0 to Rs 131.9, registering a gain of Rs 18.0 or around 15.8%.

Meanwhile, the S&P BSE BANKEX is trading at 55,063.2 (up 0.1%). Over the last one year it has moved up from 49,922.3 to 55,063.2, registering a gain of 5,140.9 points (up 10.3%).

Overall, the S&P BSE SENSEX is up 20.2% over the year.

(To know more, you can check out historical annual results for DCB BANK here and quarterly results for DCB BANK here)