RBL Bank net profit up 165% due to steady interest income and lower cost of deposits

By: |
October 29, 2020 3:15 AM

The provision coverage ratio (PCR) of the bank improved 429 bps in the September quarter to 74.75%, compared to 70.46% at the end of June, 2020.

RBL Bank provided Rs 310 crore on account of Covid-19 during the September quarter.RBL Bank provided Rs 310 crore on account of Covid-19 during the September quarter.

Private lender RBL Bank’s net profit grew 165% year-on-year (y-o-y) during the September quarter to Rs 144 crore on steady interest income and lower cost of deposits. Operating profit grew 12% y-o-y to Rs 720 crore.

The spike in bottomline came despite the bank maintaining provisions at Rs 526 crore, compared to Rs 533 crore in the same quarter last year.

RBL Bank provided Rs 310 crore on account of Covid-19 during the September quarter.

The lender’s net interest income (NII) increased 7% y-o-y to Rs 933 crore and cost of deposits was at 10 year low of 5.98%.

Vishwavir Ahuja, managing director (MD) and chief executive officer (CEO), RBL Bank, said, “We are seeing growth revival especially in our retail businesses and being well positioned on capital and liquidity we are growing in our chosen segments.”

Despite the positive signals, we continue to focus on balance sheet protection, risk mitigation and capital conservation in the near term, he added.

The net interest margin (NIM) of the lender remained at 4.34% in the September quarter, showing a y-o-y increase of 4 basis points (bps), and a quarter-on-quarter (q-o-q) decline of 56 bps.

The provision coverage ratio (PCR) of the bank improved 429 bps in the September quarter to 74.75%, compared to 70.46% at the end of June, 2020.

Provision coverage has seen a massive jump in the second quarter from 58.45% in September 2019.

The asset quality of the bank showed an improvement in the September quarter. Gross non-performing assets (NPA) ratio improved 11 bps to 3.34%, compared to 3.45% in the previous quarter.

Similarly, net NPA ratio came down 27 bps to 1.38% from 1.65% in the June quarter.

Deposits grew 3% y-o-y to Rs 64,506 crore in the September quarter, compared to Rs 62,829 crore in the corresponding quarter last year.

Sequentially deposits grew 4%, compared to Rs 61,736 crore at the end of the June quarter.

Current account savings account (CASA) ratio stood at 31.1%, compared to 26.5% as on September 30, 2019.

Advances declined 4% y-o-y in the September quarter to Rs 56,162 crore, compared to Rs 58,476 crore as on September, 2019.

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