Monday, July 9, 2012




DENA BANK’S Annual Report for FY 2012  is summarized below :

Banking Sector: 
In view of the moderation in growth and inflationary trends the non food credit growth during 2011-2012 has remained subdued as compared to FY. 2010-2011. As on March, 2012 credit growth was 17% and deposit growth was 13.40%. This resulted in wide gap between credit growth and deposit growth. This has been in spite of Scheduled Commercial Banks maintaining high interest rates on deposits for most part of the financial year.

Performance of the Bank:

Despite this challenging environment Dena Bank has been able to perform reasonably well registering an all-round growth in various parameters :

New Capital Adequacy Norms:

During the year, the Bank allotted 1.67 Cr Equity Shares of face value of Rs. 10/- at a price of Rs.90.73 aggregating Rs.151 Cr, to LIC on preferential basis. With this, GOI's holding in the Bank stands reduced to 55.24% from 58.01%. The Tier I capital adequacy ratio of the Bank under Basel II is 8.86% as against 9.77% as of March, 2011.

Capital to Risk (Weighted) Asset Ratio (CRAR) stood at 11.51% as of March 2012, compared to 13.41% as of March 2011, against the requirement of 9%. However, the Core CRAR of the Bank under Basel II is 8.86 % as on 31st March, 2012 which indicates healthy level of Core Capital.

Net Worth of the Bank improved to Rs.4,256.14 Cr as on 31.03.2012 from Rs.3,366.43 Cr as on 31.03.2011, registering a growth of Rs.889.71 Cr (26.43%).

Network and Delivery Channels:

Dena Bank opened 51 new branches during 2011-12. Total number of branches stood at 1342 as of March 2012. All branches are covered under CBS.  As at 31st March 2012, the Bank had an installation base of 543 ATMs comprising of 430 On-site ATMs and 113 Off-site.

The Bank, to meet its requirements of personnel for increasing business levels and opening of new branches, has recruited 408 officers (incl. POs) under various scales and disciplines and 404 clerks during the year.

Performance Highlights

Aggregate Business Mix (Deposits + Advances) scaled a level of Rs.1,34,326 Cr during the financial year ended 31st March, 2012. The total Business Mix of the Bank increased by  Rs.24,953.01 Cr to Rs.1,34,326.00 Cr at the end of the year 2011-12 from Rs.1,09,372.99 Cr as on 31st March, 2011, registering a growth of 22.81% .

Total Deposits have grown to Rs.77,166.80 Cr as of March 2012 as compared to Rs.64,209.62 Cr as of March 2011, a growth of 20.18%.

Total Advances stood at Rs.57,159.20 Cr as of March 2012 as compared to Rs.45,163.37 Cr as of March 2011,a growth of 26.56%.

Retail Credit posted a growth of  Rs.1,146.91 Cr from Rs.6,135.59 Cr as on 31st March, 2011 to  Rs.7,282.50 Cr as on 31st March, 2012, registering a growth of 18.69%; MSME loans stood at Rs.8,291 Cr showing an increase of 22.22% while loans to agriculture sector stood at Rs.6,989 Cr, registering a growth of 9.39% as of March 2012.

Having identified MSME as one of the growth engine Bank has significantly reduced interest rates on such advances to make it competitive and has entered into tie up with auto manufacturers for financing of three wheelers.

Total credit exposure to Power sector is Rs.8972.22 Cr which constituted 15.70% of total credit, Telecom Rs.581.00 Cr (1.02%), Road & Ports Rs.854.49 Cr (1.49%) and to ‘Other Infrastructure’ is Rs.1268.19 Cr which constituted 2.22% of total credit.

Income Analysis :

Total income has increased by Rs.1,808.63 Cr (32.49%) and stood at Rs.7,376 Cr. as compared to an Income of Rs.5,567.37 Cr earned during the previous year.

Interest income registered an increase by 34.98% and reached a level of Rs.6,794.13 Cr during the current year.

Core Fee based income has increased by Rs.102.48 Cr (27.31%) from Rs.375.25 Cr as of March 2011 to Rs.477.73 Cr as of March 2012.

Net interest income (NII) has increased by 19.15% and stood at Rs.2101.00 Cr as compared to Rs.1763.37 Cr posted during the previous year
Expenses  : Total expenses has registered an increase of 34.63 % over the previous year.

Operating Profit : Operating profit has registered an increase of 24.89% and stood at Rs.1528.43 Cr as compared to Rs.1223.79 Cr posted during the previous year.

Net Profit : The Bank is successful in posting 31.31% rise in Net Profit during the year. The Net Profit of the Bank stood at Rs.803.14 Cr as against Rs. 611.63 Cr posted during the previous year.

DIVIDEND : The Bank has recommended an enhanced dividend of 30% for current year as against 22% for the previous year.

Deposits Mobilisation :

The incremental growth in different segments of Deposit was to the extent of Rs.12,957.18 Cr during the FY 2011-12.

Share of CASA Deposits to Total Deposits during 2011-12 marginally declined to 34.46% from 35.42% in the previous year. During the year, CASA increased by 16.91 % as compared to 24.15 % in the previous year.


Advances increased by Rs.11995.83 Cr from Rs.45163.37 Cr as on 31.03.11 to Rs.57159.20 Cr as on 31.03.12, registering a growth of 26.56%. During the year, focused attention was given for accelerated lending under MSME, Agriculture and Retail sectors, strategically with policy of risk diversification.
Bank has entered into tie up with TVS Motor and Bajaj Motor for 3 wheelers financing and with TATA Motors for financing Commercial Vehicle to be covered under MSME sector.

Regional Rural Banks sponsored by the Bank :

The Bank has sponsored two RRBs namely Dena Gujarat Gramin Bank (DGGB) in the State of Gujarat and Durg Rajnandgaon Gramin Bank (DRGB) in the State of Chhattisgarh. Both the RRBs sponsored by Dena Bank have a network of 277 branches spread over 10 districts of Gujarat and Chhattisgargh. The total business mix of these RRBs stood at ` 4920.20 Cr as of March 2012. During the financial year ended 31st March, 2012, both the RRBs are profit making.

Asset Quality & Recovery Management :

Gross NPA, increased by Rs.114.26 Cr from Rs.842.24 Cr as on 31st March 2011 to Rs.956.50 Cr as on 31st March, 2012. 

Gross NPA ratio decreased to 1.67% as on 31.03.2012 from 1.86 % as on 31.03.2011

Net NPA ratio stood at 1.01% as on 31.03.2012 as against 1.22% as on 31.03.2011.

Net NPAs increased by Rs.22.78 Cr from Rs.548.95 Cr as on 31st March, 2011 to Rs.571.73 Cr as on 31st March, 2012.

Provision Coverage Ratio stood at 75.53% i.e. well above the regulatory requirement of 70%.

Recovery efforts in NPA Accounts yielded good results. Cash recovery in NPA Accounts during 2011-12 was Rs.222.56 Cr and up gradation in the accounts was Rs.191.47 Cr. The Bank recorded recovery in written off accounts during the year of Rs.81.93 Cr including recovery of interest in written off accounts of Rs.12.17 Cr. 

The Bank has conducted 1461 recovery camps which were attended by 16940 borrowers. A total of 2785 accounts were settled for Rs.32.46 Cr and 864 accounts were upgraded for Rs.21.33 Cr.

Outlook for FY 2012-13 : Against the backdrop of uncertain global conditions and fragile domestic demand, recovery in the economy is expected to remain moderate. With RBI ensuring adequate liquidity cushion in the financial system by adjusting policy rates to sustain growth, at the same time without risking external balance or inflation by excessively fuelling demand, the projected growth for 2012-2013 being higher than 2011-2012, performance of Banking sector is expected to improve.


Overall, Dena Bank is in sound Health and on a Good Growth Trajectory. Its loan Portfolio is reasonably good and unlikely to slip into Bad Debts, though some restructuring in Power sector is always possible.

The Net NPAs can come down from present levels - with the kind of efforts the bank is making.

It is a GOOD BUY for medium / long term Investors.

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