Shares of DCB Bank fell as much as 7 per cent to Rs 98 after the private sector lender’s first-quarter earnings disappointed the Street. DCB Bank had announced its earnings for the June quarter after market hours yesterday.
The bank’s net profit was flat at Rs 47 crore in the quarter ending June 2016 as compared to the same quarter of the year-earlier period.
However, the lender’s asset quality showed some deterioration on a sequential basis. Gross non-performing assets (NPA) inched up to 1.72 per cent of total advances in June quarter against 1.51 per cent in the March quarter.
The lender’s operating expenses also ticked higher. It rose 27 per cent to Rs 144 crore in June quarter from the year-earlier quarter.
In October, the bank had said that it wanted to open 150 additional branches within 12 months. The stock took a hammering on concerns that the additional expenses would hurt earnings. Later, the management changed its strategy and spread the expansion programme over two years.
DCB shares have outperformed the Bank Nifty in the past six months. DCB shares rose 33 per cent as compared to 21 per cent gain in Bank Nifty.
At 1:00 p.m., shares of DCB were down 3.5 per cent against a 0.30 per cent decline in Nifty50 index.