Debasis Mohapatra
Bengaluru, 2 May 2026
DCB Bank is likely to sustain its growth momentum in the current financial year (FY27) on the back of sound credit growth coupled with further improvement in asset quality.
In a research note, Anand Rathi said that stable margin, healthy fee income and moderate credit cost would supplement the private sector lender’s growth this fiscal.
“Growth visibility remains healthy with the management guiding for 18-20% loan growth. Looking ahead, with stable margin, healthy fee income momentum and moderate credit cost, we expect RoE (return on equity) to sustainably improve from around 11-12% to 13-14% over FY27-28 period,” Anand Rathi said in a research report.
Asset quality of DCB Bank improved during the fourth quarter of FY26, which the bank was likely to sustain in coming quarters.
Net slippages of DCB Bank stood at -21 basis points in Q4FY26 as compared to 45 bps in the third quarter of last fiscal. Gross slippages (excluding gold) declined to 1.5% in the fourth quarter of last fiscal year, falling below 2% after multiple years with broad-based improvement across segments, the report noted.
“Collection trends across core products (housing loan, loan against property and commercial vehicle) also improved. PCR (provision coverage ratio ex-write-offs) saw a sharp 404bps quarter on quarter improvement to 64.3%. Its standard restructured book declined by 17.6% y/y (1.3% of loans). With improving business traction and normalising collections, we expect the bank’s net slippages to remain contained at sub-50 bps levels in the near-term,” Anand Rathi said in the report.
Credit growth rate during the Q4FY26 was at 17.6% year-on-year basis. While gold loan grew 73% over the same period last fiscal, corporate loan posted a growth of 54.7% & agri loan posted a growth of 19.6% during this period.
“The management guides for 18-20% growth in FY27 with incremental growth from mortgage, MSME and CV segments. Co-lending is expected to grow broadly in line with overall credit,” the report said.
Deposit growth accelerated to 20.9% year on year (versus 19.5% in Q3FY26), supporting an improvement in LDR (loan-to-deposit ratio), the Anand Rathi report added.
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