NEW DELHI: DBS Bank India (DBIL), the wholly-owned subsidiary of Singapore’s DBS Bank, has seen a sharp rise in bad loans, with gross non-performing assets (NPAs) rising sharply to 12.93% in FY21 after the merger of Lakshmi Vilas Bank (LVB), from just 2.6% in March 2020.
Net NPA rose to 2.83% at the end of March 2021 as against 0.47% in March 2020, with provision coverage ratio at 84%. Excluding the LVB portfolio, gross NPAs remained moderate at 1.83%.
“We have made considerable progress with the integration of Lakshmi Vilas Bank (LVB) since the amalgamation in November 2020 even with the dislocations due to the second wave of the pandemic. While, as expected, there has been an immediate impact on our financial results due to the high net NPAs and operating losses at LVB, we are confident of realising the long-term prospects of the combined franchise,” said Surojit Shome, MD and CEO, DBS Bank India.
However, the lender has been able to register a nearly three-fold rise in net profit to Rs 312 crore for the year ended March 2021 (FY21), up from Rs 111 crore in FY20. During the year under review, net revenues grew 85% to Rs 2,673 crore (including Rs 134 crore from LVB).
Following the merger with the old age private sector bank, Shome said that the bank has already been able to revitalise the gold loan business and grow deposits. DBS Bank India reported a 44% increase in the overall deposits to Rs 51,051 crore, including Rs 18,823 crore of it from LVB. Savings deposits grew 207%, the current account was up 98% year on year.