DCB Bank has reported a strong financial performance for the fourth quarter of FY26, showcasing growth that surpasses industry averages. The bank’s deposits rose by 20.9% year-on-year, while loans increased by 17.6%. A significant improvement in asset quality was noted, with net slippages turning negative at -21 basis points, compared to 45 basis points in the previous quarter, Q3FY26. Gross slippages, excluding gold, fell to 1.5%, reflecting widespread enhancements across various segments.
The bank’s standard restructured loans decreased by 17.6% to ₹780 crore, which accounts for 1.3% of total loans. With improving business conditions and normalized collections, analysts expect net slippages to remain contained at levels below 50 basis points in the near term.
Credit growth was notably driven by strong increases in particular sectors: gold loans surged by 72.9%, corporate loans by 54.7%, and agricultural loans by 19.6%. Management forecasts an 18-20% growth in FY27, with additional contributions expected from mortgage, MSME, and commercial vehicle segments.
Expectations concerning net interest margins (NIM) suggest they will remain stable, as pressure on yields is anticipated to be counterbalanced by a reduction in funding costs. Fee income experienced a robust 23% growth, supported by strong performances in third-party distribution, foreign exchange, and trade finance, while operating expenses grew at a slower rate of 11.3%. Core operating profit increased by 27.5%.
Looking forward, analysts predict a structural improvement in profitability, with return on equity (RoE) projected to rise from a range of 11-12% to 13-14% over the next two fiscal years, FY27 and FY28. The bank has received a “Buy” rating, with a 12-month target price set at ₹272, based on a valuation of 1.1 times FY28 expected price to adjusted book value (P/ABV).
Published on April 27, 2026.
