Performance Highlights (FY 2025-26)
Dhanlaxmi Bank delivered robust financial performance in FY26 with net profit surging 54.2% to ₹102.75 crore from ₹66.64 crore in the previous year. Total business grew 19.7% to ₹33,771.57 crore, comprising deposits of ₹18,642.88 crore (↑16.42%) and gross advances of ₹15,128.69 crore (↑23.95%). The bank demonstrated significant improvement in asset quality with Gross NPA ratio declining to 1.89% from 2.98% and Net NPA ratio falling to 0.51% from 0.99% year-on-year.
Capital Adequacy & Funding
The Bank maintained strong capital buffers with CRAR at 18.92% (well above the regulatory minimum of 11.50%), comprising CET 1 ratio of 16.11% and Tier 2 capital of ₹233.46 crore. In April 2025, the bank raised ₹150 crore through Basel III compliant Tier II bonds with 10.50% coupon rate, listed on NSE. Liquidity metrics remained healthy with Liquidity Coverage Ratio at 126.41% and Net Stable Funding Ratio at 148.10%.
Business Expansion & Digital Initiatives
Branch network expanded to 264 branches across 14 states and 2 union territories, with new openings in Sulthan Bathery, Dindigul, and Thiruporur. The bank implemented extensive digital transformation including migration to 'dhan.bank.in' domain, UPI integration with GSTN for tax payments, automated Loan Origination System, real-time fraud monitoring, and enhanced digital KYC processes. These initiatives supported operational efficiency with cost-to-income ratio improving to 73.45% from 85.42%.
Regulatory Compliance & Governance
The disclosure complies with RBI Directions DOR.CAP.REC.70/21-01-002/2025-26 dated November 28, 2025 under Basel III Pillar III requirements. The board composition remained stable with K N Madhusoodanan as Chairman and Ajith Kumar K K as MD & CEO. The bank faced minor regulatory penalties including ₹75,000 fine from BSE for delayed half-yearly disclosure filing. No dividend was recommended for FY26 due to offset of previous years' losses.
Risk Management & Outlook
Credit risk management followed Standardised Approach using external ratings, while market risk used Standardised Duration Approach. Provision coverage ratio improved to 92.46% (including technical write-offs) with recoveries of ₹73.97 crore from technically written-off accounts. The bank maintains adequate capital buffers and liquidity position to support future growth while continuing digital transformation initiatives to enhance customer experience and operational efficiency.