Credit rating agency, Fitch Ratings has affirmed rating of Development Credit Bank’s (DCB) long-term facilities to ‘BBB (ind)’ with stable outlook. The rating agency has also affirmed the bank’s Rs 100 crore lower tier 2 subordinated debt programme at ‘BBB (ind)’.
The ratings take into account the bank’s stabilizing asset quality with the rundown of its problematic retail loan portfolio, reasonable funding profile (largely retail) and adequate capitalization.
Nevertheless, the ratings remain constrained by its small franchise, concentration of advances in SMEs and mid-size corporates which remain susceptible to economic cycles, large tenor mismatches between its asset and liabilities, and weak profitability.
Development Credit Bank provides banking services to customers in retail, small and medium enterprises, and corporate banking markets in India. It offers current and savings accounts, fixed deposits, recurring deposits and loans.
