DCB Bank (DCBBANK) Q1 25/26 earnings summary

Executive summary

• Deposits grew 20.02% and advances 21.42% year-over-year in Q1FY26, with balance sheet size surpassing INR 1,13,000 crores.

• Operating profit reached INR 327 crore, the highest ever for any quarter, and profit after tax rose 20% year-over-year to INR 157 crores.

• Maintained robust capital adequacy at 16.66% and provision coverage ratio of 74.04%.

• Continued focus on granular, secured lending, digital transformation, and branch expansion, with 465 branches and 98% digital transaction penetration.

• Unaudited financial results for Q1 FY26 were approved by the Board and reviewed by joint statutory auditors, who issued an unmodified review report.

Financial highlights

• Total income for Q1 FY26 was ₹2,049.69 crore, up from ₹1,632.25 crore in Q1 FY25; net profit for Q1 FY26 stood at ₹157.26 crore.

• Net interest income for Q1FY26 increased 17% year-over-year to INR 581 crores; other income surged 65% to INR 236 crores.

• Operating expenses rose 13% year-over-year, but cost-to-income ratio improved to 59.97%.

• Gross NPA reduced to 2.98% (from 3.33% Q1FY25); net NPA at 1.22%.

• Provision coverage ratio (PCR) at 74.04%, down 44 bps from March due to technical write-offs.

Outlook and guidance

• Targeting to double balance sheet size every 3-4 years, focusing on mortgages, MSME/SME, gold loans, co-lending, and construction finance.

• Credit cost guidance revised to below 45 bps for upcoming quarters, following full provisioning for MFI and unsecured DA NPAs.

• Aims for NIMs of 3.5%-3.65%, GNPA below 2.5%, NNPA at 1%, and cost-to-income ratio at or below 60%.

• Return on assets targeted at 1% or above, and return on equity closer to 14%.

• Fee income expected to grow in line with or slightly below balance sheet growth.