RBL Bank Q1 Review - Elevated Provisions Result In Loss: Dolat Capital
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Dolat Capital Report
Despite in line operating metrics with pre provision operating profit growth at 17% YoY, RBL Bank Ltd. reported a net loss of Rs 4.6 billion in Q1 FY22 led by sharp rise in provisions owing to elevated slippages at 9%, increased in provision coverage ratio from 52% to 61%, and high write-offs from credit card book.
This, along with additional Covid-19 provisions of Rs 2.4 billion (0.4% of advances) resulted in credit costs of 10% for the quarter against 4-5% in the previous two quarters.
Majority (97%) of slippages were from retail book, mainly micro finance institution, credit card, and business loans.
Unlike peers, RBL Bank did not go for restructuring of its unsecured MFI/CC loans, with limited overall restructuring at 1.9% of advances.
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