RBL Bank reported a 54% year-on-year decline in its net profit to Rs 114.4 crore for the quarter ended March 31 on account of increased provisioning.
Provisions surged three times to Rs 614 crore in the quarter from Rs 200 crore a year ago. The bank has made additional provisioning of Rs 115 crore on account of Covid-19. It was required to make provisions of only Rs 13 crore, as per regulatory requirement. The provision coverage ratio (PCR) of the private lender stood at 64%, compared with 58% in the previous quarter.
The bank has provided moratorium to around a third of its customers, RBL Bank MD & CEO Vishwavir Ahuja said in a conference call after results. “We have taken accelerated 100% provisioning as opposed to norm of 70% after 90 days and then 30% after 180 days, on existing non-performing asset (NPA) book of credit card.”
He further said the bank believes risk is emerging in the retail segment . “We see risk from credit card portfolio side once job losses start to happen, MSMEs will take much longer to come back… so, we see some stress from there,” Ahuja added. However, the bank does not expect much stress from microfinance because of its ability of bouncing back. “Overall, if we are ending this year with 340 bps credit cost, all taken together, including additional provisioning, for next year, I expect the credit cost to remain at same level of around 340 bps,” he said.
Advances grew 7% y-o-y to Rs 58,019 crore. However, deposits declined 1% to Rs 57, 812 crore against Rs 58,394 crore in the same quarter last year. Operating profit was up 37% y-o-y at Rs 765 crore. The net interest income (NII) was up 38.21% to Rs 1,021 crore against Rs 739 crore last year.