DBS Bank India FY’21 net profit climbs to 312 crore

DBS Bank India’s net profit jumped 181% in 2020-2021 to reach 312 crore, from 111 crore in fiscal year 2019-2020.

As of November 27, 2020, Lakshmi Vilas Bank (LVB) merged with DBS Bank India Ltd (DBIL) and results include the performance of LVB since that date.

DBIL’s net revenue increased by 85% to reach 2,673 crore in 2020-2021, compared to 1,444 crore in 2019-20. The net income for the last financial year includes cro134 crore of LVB.

Total deposits increased 44% to 51,501 crore, including 18,823 crore from LVB.

Savings account balances increased by around 207 percent and current account balances increased by around 98 percent year-on-year, including growth from the merger.

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The overall CASA ratio improved from 19 percent to 31 percent.

Gross non-productive assets (APN) remained moderate at 1.83% for DBIL excluding the LVB portfolio.

While the gross NPA deteriorated to 12.93 percent after the LVB merger, the net NPA for the bank on a combined basis stands at 2.83 percent taking into account the provision coverage of 84 for hundred.

“After the merger, the main objective of the bank has been to welcome LVB employees and customers into the DBS family, to unify the LVB and DBS workforce and to rebuild LVB’s business,” said DBIL in a press release.

Integration of platforms

The integration of operating platforms and branches is currently underway.

“The steady growth in LVB’s current and savings account balances as well as the gold loan portfolio in 2021 is an early indicator of the success of the current strategy,” he added.

Surojit Shome, chief executive and CEO of DBIL, said there has been tremendous progress with the integration of LVB since the merger in November 2020, even with dislocations due to the second wave of the pandemic.

“Although, as expected, there was an immediate impact on our financial results due to the high net NPAs and operating losses of LVB, we are confident of realizing the long term prospects of the combined franchise,” said he said, adding that in the old LVB operations, DBIL has already been able to revitalize the gold lending business and increase deposits.

“Our immediate priority is to integrate operating systems and processes so that we can provide the best solutions to a larger franchise of customers,” he added.

DBIL’s capital adequacy ratio was 15.13%, and CET1 was 12.34%. During the year, DBS Bank injected 2,500 crore into DBIL to support the merger.