The Q2FY16 performance of DCB Bank has been disappointing. Higher provisioning affected the bottomline while asset quality shows that some caution is still required. Net profit for the quarter was down 10% (YoY) at Rs.37 crore while provisions surged 58% to Rs.22 crore and tax expense burgeoned almost 4 times to Rs.19.5 crore. NII was at Rs.150 crore, up 27% and other income showed a good 32% increase. NIM showed a marginal improvement from 3.72% to 3.79%. In terms of bank business, advances during the quarter rose 27% and deposits showed a 24% rise.

In terms of asset quality, Gross NPA was up at 1.99% from 1.96% (QoQ) while Net NPA showed a slight fall from 1.22% to 1.16%. Capital adequacy ratio was at 13.63 per cent under Basel III. The bank has stated that it plans to double its branch network from the present 160 branches this fiscal saying this is required to beat the increased competition. CASA ratio has risen from 24.10% to 25.46% (YoY).

The market is obviously not happy about the numbers as it is currently at the 20% lower circuit at Rs.107. It had closed yesterday at Rs.133.45.