DCB BANK Chairmans Speech

This year has seen the major expansion of the Bank branch network according to the strategy we had set forth in October, 2015. I am happy to report that this has been successfully executed so far and our geographical expansion has begun to pay dividends. Returns from these branches will be more fully realized in the years ahead. Given this approach, this year’s theme for the annual report is “The Idea of Expansion”. The essence of a successful expansion in an enterprise is a function of its readiness and its timing. I do feel that we have got both right.

Given two successful years of adequate profitability, we are announcing our first dividend in thirteen years. This reflects a long and arduous task of rebuilding the Bank from first principles and developing a culture that is unique to ourselves. Last year’s annual report described this culture in substantial depth. DCB Bank is on a path of profitable growth, with its NPA’s under control and adequate provisioning. On almost all ratios, the Bank demonstrates sound banking practices and we are determined to ensure that this continues year by year into the future.

I am happy to report that DCB Bank’s annual results for FY 2017 demonstrated the efficacy of our strategy. We have continued to grow as per plan in all parameters. Operating Profit was up 20% at Rs, 418 crore; PBT up 17% at Rs, 307 crore and PAT up at Rs, 200 crore. Our effective tax rate in FY 2017 was 34.90%. Our Balance Sheet grew by 26% to Rs, 24,046 crore and our NIMs improved to 4.04%. Our Gross NPAs increased by 29% to Rs, 254 crore and Net NPAs by 28% to Rs, 124 crore. The Net NPA ratio was 0.79% while our Provision Coverage Ratio was 73.80%. This is an impressive outcome despite a very difficult year for the economy and especially the banking sector. It illustrates that DCB Bank’s retail strategy is paying dividends and despite stormy seas the Bank is holding its course.

This year has not been an easy one. Industry saw muted growth and this reflected itself on the SME and MSME businesses which are our major area of concentration. Most companies were expecting a much more robust second half as the monsoons were evenly distributed and this suggested that consumer demand would return across industry classes. Unfortunately the demonetization hit the economy in the short run. Of course in the long term it can benefit the country. DCB Bank was also impacted despite which it turned out results which were creditable. I was particularly proud that the unique culture that I spoke about was witnessed in action. The dedication of our staff to our clients was exemplary; not a single DCB Bank branch was closed even though cash was in such short supply. We tried our utmost to ensure that cash was distributed as evenly as possible. The many letters we received from our customers is a proud testament to our handling of this crisis.

The year also saw a number of achievements which were recognized. We won the Best Data Centre Design award for the Bank’s Data Centre in the 2016 Data Centre Summit; the BSFI Digital Innovation Award for the Innovative usage of Emerging Technology and the Finality Award for the first Aadhaar based ATM. The culture and human resource areas also were recognized. During the year we conducted over 1,100 workshops that covered 90% of our employees with 73% of employees participating in on line learning. DCB Bank has been certified as a Great Place to Work for building High Trust and High Performance Culture.

This all adds up to a process of continuous improvement which is a journey that will continue into the future. In a difficult year for the banking industry, DCB Bank as the small private sector bank has been able to avoid the pitfalls presented by the environment and to grow steadily maintaining a quality portfolio while enhancing its profitability. The Balance Sheet grew by 26% and is currently Rs, 24,046 crore. CASA did particularly well partly as a result of demonetization but we intend to sustain its momentum in the coming year.

As we look to the future we face an environment that imposes challenges across industry. We need to be mindful of the role of technology and the service support that our clients will expect in the months and years ahead. We are determined that DCB Bank will be ahead of the curve that this opportunity presents through the creativity culture that we have built up over the years and our constant emphasis on innovation. Simplicity is a major driver of innovation. Simplifying both internal processes and the customer interface combined with a problem solving capability which customers in the future will demand. Get things done quickly and efficiently will be the mantra of the future. The DCB Bank team is fully dedicated to this process and we hope to shape the possibilities that the future will bring.

Nasser Munjee

Chairman New Delhi, April 14, 2017

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