DCB Bank Q1 FY26 Earnings Call: Deposit Growth 20%, Assets Up 21%

* DCB Bank reported a 20% Y-o-Y growth in deposits and a 21% Y-o-Y growth in assets. * The bank's bottom-line grew by 19.72% in Q1. * Operating profit reached ₹327 crore, the highest ever for any quarter. * Fee income was ₹236 crore, also the highest ever, including a core fee income of ₹124 crore, up 17.5% Y-o-Y. * Operating revenue grew by 28%, while operating costs increased by 13%, resulting in an operating leverage of 15%, the highest in the last four years. * The bank made accelerated provisions for the entire NPA stock of MFI and unsecured DA as of March 31, 2025. * Despite three rate cuts totaling 100 basis points, NIM reduction over Q4 was limited to 9 basis points due to effective cost of fund and deposit management. * The slippage ratio increased due to higher slippage in MFI and unsecured DA, as well as small ticket secured DAs. * The bank's DA book is used for experimentation to test and validate different products and geographies. * The bank reduced headcount by about 800 people while growing by 20%, leading to higher productivity, aided by technology. * The bank expects credit costs to be below 40 basis points. * The bank aims for a cost-to-average assets ratio below 2.5%. * Co-lending will be capped at 15% of the bank’s book, with a focus on shorter-term and fixed-rate loans. * IBPC (Inter-Bank Participation Certificates) was used to manage NIM impact, with both PSL (Priority Sector Lending) and non-PSL IBPC. * Management indicated consistent performance is expected to continue, with both deposit and loan growth at similar levels to the last four quarters. * Management is happy with the way NIMs have been managed and continuous work is being done on the cost of funds and deposits front to minimise the NIM impact.