Latest News | RBL Bank Profit Jumps to Rs 202 Cr in Q2 on Sharp Fall in Provisions

Mumbai, Oct 22 (PTI) Mid-size lender RBL Bank on Saturday said a massive drop in provisions boosted its bottom-line by almost seven times to Rs 202 crore in the quarter to September from Rs 31 crore in the year-ago period.

The bank, which has been down in the dumps since 2019, had a provision of Rs 651 crore in the September 2021 quarter, including Covid-19 related provisions, which fell to about Rs 241 crore in the reporting quarter, R Subramaniakumar, the managing director of the bank told reporters at the earnings call.

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On the asset quality side, the bank overall performed better with gross NPAs improving to 3.80 per cent from 4.08 per cent but net NPAs rose to 1.26 per cent from 1.16 per cent on a sequential basis and the provision coverage ratio including for technical write-offs fell to 84.3 from to 85.3 in June 2022.

The bank's fresh slippages stood at Rs 746 crore while net slippages were Rs 498 crore.

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He sounded bullish about the second half saying, all the verticals are doing well and so is the asset quality. Going forward, the bank will continue to push consumer books led by credit card and microfinance businesses and will also launch two-wheeler, used-cars and gold loans in the third quarter.

"We've completed H1 on a satisfactory note on all fronts with substantial improvement on the profitability side. Advances growth at 17 per cent is sustainable and we have a target of growing over 20 per cent from next fiscal. Granular deposit growth is picking up and asset quality continues to be stable.

"Going forward the focus will be to consolidate, leverage and optimise the existing platforms to accelerate profitable balance sheet growth. We'll continue to focus on our key niche areas of credit cards and microfinance, while accelerating diversification across more secured retail products such as two-wheeler, used-cars and gold loans in the third quarter," said Subramaniakumarm, who assumed the office only four months ago.

He said the credit card book is around Rs 14,000 crore across 4 million customers and the credit cost is among the lowest at 40 bps of the outstanding and the delinquency rates are better than the pre-pandemic levels now.

Revenue grew 9 per cent to Rs 1,648 crore, driven by a 16 per cent uptick in net interest income at Rs 1,064 crore and a net interest margin of 4.55 per cent. Other income declined 2 per cent to Rs 583 crore as the bank had taken a minor hit on the treasury side.

Cost to income stood at 67.8 per cent compared to 68.90 per cent on year and 54.20 percent in the previous quarter.

Deposits grew 5 per cent to Rs 79,404 crore, of which the low-cost Casa grew 7 per cent to Rs 28,718 crore and the Cass ratio improved to 36.2 from 35.4 a year ago. Retail deposits grew 4 per cent to Rs 32,832 crore.

While net advances grew 12 per cent to Rs 62,942 crore, with a retail-wholesale mix of 52:48 percent.

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