DCB Bank (DCBBANK) Q3 25/26 earnings summary

Executive summary

• Customer advances grew 18.46% YoY and deposits rose 19.54% YoY in Q3FY26, with total business surpassing INR 1,24,000 crores and profit after tax up 22% YoY to INR 184.74 crore, despite a one-time INR 26.87 crore labor code impact.

• NIM improved to 3.27% for the quarter, aided by a 10 bps drop in cost of deposits to 6.86%.

• Maintained healthy capital adequacy ratio at 15.84% and CASA ratio at 22.77%.

• Asset quality improved, with Gross NPA at 2.72% and Net NPA at 1.10%, both multi-quarter lows.

• Operating profit grew 19% YoY, with income up 16% and expenses (including one-time) up 15%.

Financial highlights

• Net Interest Income for Q3FY26 grew 15% YoY to INR 625 crores; other income up 20% YoY to INR 221 crores.

• Core fee income robust at INR 182 crore, led by third-party distribution, trade finance, and processing fees.

• Credit costs at 0.37%, below the 0.45% target; cost-to-income ratio improved to 61.84%.

• Slippage ratio at 3.08%, lowest in 18 quarters; provision coverage ratio at 75.35%.

• Advances at INR 56,600 crores (+18.46% YoY); deposits at INR 67,754 crores (+19.54% YoY).

Outlook and guidance

• Confident in maintaining 18%-20% YoY growth and achieving 13.5% ROE in FY 2026-27 and 14.5% in FY 2027-28.

• Aims to double balance sheet size every 3-4 years, targeting ROA above 1% and ROE of 13.5% by FY27.

• NIM expected to remain strong through Q1/Q2 next year, barring repo rate changes.

• Mortgage growth expected to return to 18%+ YoY, in line with overall asset growth.

• Fee income targeted at 1% of average assets, with current levels at 1.1%.