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DCB Bank reverses decision on branch expansion

DCB Bank, which had announced an ambitious plan to set uo 300 branches in two years to take on competition by the proposed small finance banks and payments banks, went back on the decision following adverse market reaction. The bank’s stocks were down almost 30% as investors feared the proposed expansion would influence its earnings. The bank’s chairman Nasser Munjee had said the bank would double its branch network over the next 12 o 15 months but as the announcement led to a series of downgrades from analysts as well as a severe hammering of its stocks, the bank came out with a statement saying it has received feedback on the branch expansion plans from investors, analysts and other stakeholders, and in view of this and in close consultation with the chairman, the management team has decided to install 150 plus branches in a cautious, prudent and calibrated manner over a period of 24 months (instead of 12 months). The bank had said the only way it can take on the competition is by expanding its network, which it admitted would affect its earnings, but there was no other go.

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