RBL Bank Q2 Review - Weaker Than Anticipated Growth Trends: Dolat Capital
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Dolat Capital Report
RBL Bank Ltd.'s operating metrics and profit after tax were behind estimates, both posting a 2-4% de-growth YoY.
Weak growth trends and elevated slippages resulted in lowest net interest margin in the last several quarters at 4.1%, despite continued decline in cost of fund.
While slippages were on expected lines at 8.7%, restructured book increased sharply to 3.7% of loans (Rs 20 billion) against 2% in the last quarter. 17% of restructurings are from micro finance institution portfolio, 62% from other retail (mainly secured), and rest from wholesale book.
Gross non-performing assets increased by 40 basis points QoQ to 5.4%.
RBL Bank utilised 40% of contingency buffer during the quarter, with remaining standard buffers at 0.7% of advances. The bank has provided 13% against its restructured portfolio.
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