After Lakshmi Vilas Bank Merger, DBS Bank India Reports Higher Net Profit for FY21; Zoom NPA – The New Indian Express

Through PTI

MUMBAI: DBS Bank India, the wholly-owned subsidiary of the Singaporean lender, saw an increase in net profit for the year 21 to 312 crore on the merger of Lakshmi Vilas Bank (LVB), but reported a huge increase in loans misfires as a result of the merger with the private sector old age bank.

DBS Bank India, which bailed out LVB and in the process increased its network, had reported a net after-tax of Rs 111 crore in FY20.

The combined entity’s gross non-performing assets soared to 12.93 percent, much of the pressure coming from the former LVB’s portfolio.

Net NPAs stood at 2.83 percent with a provision coverage ratio of 84 percent.

The bank’s managing director and chief executive, Surojit Shome, acknowledged the pain on the asset quality front and operating losses and also called it “expected lines”.

???? We are confident of realizing the long term prospects of the combined franchise, ?? Shome said.

There has been ?? considerable progress ?? with the integration of LVB since the merger in November 2020 even with the dislocations due to the second wave of the pandemic, he said, adding that the immediate priority is to integrate operating systems and processes.

DBS has been able to “revitalize the gold lending industry and increase deposits,” added Shome.

The bank reported a 44% increase in total deposits to Rs 51,051 crore, including Rs 18,823 crore from LVB, according to an official statement, adding that savings deposits increased by 207% and the current account by 98%.

The share of current accounts and low-cost savings accounts after the merger with LVB, which had 563 branches, improved to 31% from 18% previously, he said.

Net advances reached Rs 36,973 crore, of which Rs 10,685 crore came from LVB, he said.

With the injection of Rs 2,500 crore of capital into the parent company’s bank during the year, the overall capital adequacy ratio of DBS Bank India stood at 15.13%, with the CET1 of 12.34% base.

In November, RBI and the government announced the merger of the domestic private sector lender with an entity wholly owned by a foreign bank, into which the Singaporean lender has ensured to inject the additional capital.

The program, which has also been the subject of legal challenges, was announced after other proposals failed.

Currently, DBS Bank India has 600 branches in 19 states and 5,500 employees.

According to the press release from DBS, after the merger, the main objective of the bank was to welcome LVB employees and customers into the DBS family, to unify the workforce of LVB and DBS and to rebuild the activities of LVB. .

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.