RBL Bank Q2 Results: Net Profit Falls 79% On Higher Provisions
The lender's net profit fell 79% year-on-year to Rs 30 crore in the quarter ended September.
RBL Bank Ltd.'s quarterly profit slumped on higher provisions against bad loans.
Net profit fell 79% year-on-year to Rs 31 crore in the quarter ended September, the lender said in an exchange filing. Analysts polled by Bloomberg had estimated a net profit of Rs 80 crore. That came as provisions rose 33.6% year-on-year to Rs 651.5 crore.
Net interest income, or the bank's core income, fell 1.8% from the preceding year to Rs 915.5 crore. Other income rose 42% from a year ago to Rs 593 crore.
The bank's asset quality worsened on a sequential basis. Gross non-performing asset ratio stood at 5.4% as of September, compared with 4.99% as of June. Similarly, net NPA ratio rose 13 basis points quarter-on-quarter to 2.14%.
Gross slippages fell 10.3% over the preceding quarter to Rs 1,217 crore. A large part of the slippages came from the bank's microfinance and credit card portfolios.
Upgrades during the second quarter stood at Rs 180 crore, recoveries at Rs 290 crore and write-offs at Rs 527 crore.
"The gross NPAs have now peaked and we expect them to trend down from the next quarter. We expect to bring down gross slippages to a third by the second half of the year," said Vishwavir Ahuja, the bank's managing director and chief executive officer. "Net NPAs should be below 2% by the end of the year."
The bank restructured loans worth Rs 1,352.4 crore under the Reserve Bank of India's two Covid-19 restructuring schemes. Of this, restructured loans worth Rs 136.1 crore had turned to NPA by Sept. 30, the bank said.
Business Growth
Outstanding advances remained flat at Rs 56,009 crore. While wholesale advances rose 5% year-on-year to Rs 25,224 crore, retail advances fell 4% year-on-year to Rs 30,784 crore.
According to Ahuja, the bank's corporate loan business had started showing signs of growth over the last 40 days. Even in the microfinance and credit card portfolios, where the bank saw has seen higher slippages, the bank is seeing growth returning.
"We would like to maintain the microfinance book to about 10% of the total loan book," Ahuja said. "It's a business we're excited by and the quality of the new book has been holding up well."
Outstanding deposits for RBL Bank rose 17% year-on-year to Rs 75,588 crore. Current account savings account deposits rose 33% from a year ago to Rs 26,734 crore. CASA ratio improved to 35.4% of total deposits from 33.7% as of June 30.