RBL Bank on Thursday posted a net profit of Rs 201 crore for the quarter ended June 30, against a loss of Rs 459 crore in the year-ago period, as it saw a massive decline in provisions. The bank’s provisions fell 82% year-on-year to Rs 253 crore owing to an improvement in the asset quality.
Despite posting an after-tax profit, the bank saw a 31% Y-o-Y decline in its pre-provisioning operating profit of Rs 529 crore on account of a fall in other income. Other income in the quarter under review fell 6% YoY Rs 614 crore due to trading losses. Losses in non-core operations were contained as the bank’s fee income improved, led by charges on credit cards, processing fee and general banking services.
The net interest margin (NIM) remained largely flat at 4.4%. The management expects a small increase in the NIM from this level for the rest of the fiscal.
The net interest income improved to Rs 1,028 crore, up 6% YoY as the yield on advances improved on both retail and wholesale advances, while cost of funds moderated. Total deposits grew 6% on year to Rs 79,216 crore and the current account, savings account (CASA) ratio fell to 36.0%, compared with 33.7% in the previous year.
The asset quality improved due to better recoveries and higher upgrades. The bank also saw a decline in net slippages to Rs 273 crore, against Rs 1,069 crore in year-ago period. The gross NPA ratio decreased to 4.08%, against 4.40% a quarter ago and 4.99% a year ago. Net NPA ratio stood at 1.16%, compared with 1.34% a quarter ago and 2.01% a year ago.