RBL Bank on Thursday reported a 6.15% year-on-year growth in its net profit for the December quarter to Rs 156 crore on the back of a 30% fall in provisions on a Y-o-Y basis to Rs 423.88 crore. The net interest income rose 11.23% YoY to Rs 1,010 crore. The net interest margin, a key measure of profitability, rose 20 bps sequentially to 4.3%.
Advances grew 3% YoY to Rs 58,141 crore. Retail advances fell 6% to Rs 30,900 crore, while wholesale advances grew 16% YoY to Rs 27,241 crore. Deposits grew 10% to Rs 73,639 crore. Current account savings account (CASA) deposits grew 21% YoY to Rs 25,318 crore and the CASA ratio as on December 31, 2021 stood at 34.4%, up from 31.1% as on December 31, 2020.
Rajeev Ahuja, interim MD and CEO, said while there were some challenges on the deposit front in the last week of December, the bank has seen stability return and is now clocking deposit accretion at higher-than-December levels. “We continue to remain well capitalised with sufficient liquidity buffers.”
Ahuja observed that on the business front, Q3 was a good quarter, given the improving activity after the severe second wave in Q1 and its spillover impact in Q2. “Asset quality position, which got impacted because of the second wave, continues to improve,” he said.
The bank recognised slippages of Rs 766 crore during Q3FY22, compared with Rs 1,217 crore in Q2, and Rs 1,470 crore in Q3FY21. RBL Bank saw an improvement on the asset quality front in Q3, with the gross NPA ratio falling 56 bps sequentially to 4.84%. The net NPA ratio fell 29 bps to 1.85%.
Ahuja said the bank is seeing an improvement in the credit cards and microfinance segments, where the asset quality had been deteriorating in past quarters. “The trend in cards has now normalised to pre-pandemic levels. In microfinance, while slippages this quarter were lower than the previous one, it is still higher than normal trends. But, we are seeing that incremental flows into slippage are slowing and we expect slippages to be lower in the fourth quarter onwards,” he said.
On appointment of a full-time CEO after the sudden exit of former chief Vishwavir Ahuja in December, the management said the matter was being treated expeditiously by the board. “I cannot make any comment on the timeline. There is a very specific mandate with the screening committee. There is an external member, a consultant, which has been announced. All of them are doing their job. All of them are highly capable. We are also very keen to have this matter behind all of us and the bank,” Rajeev Ahuja said.
Pradip Shah, chairman, National Asset Reconstruction Company, has been appointed the external member and Egon Zehnder is the executive search firm that will assist the board.
The capital adequacy ratio of RBL Bank as per Basel III stood at 16.58% and the common equity tier-I (CET-I) ratio was at 15.8% at the end of December.