The anticipated slippages are likely to come from the bank’s exposure to three-four corporates, which adds up to nearly `1,000 crore, or 1.7% of the bank’s total advances.
Private sector lender RBL Bank on Friday posted a 41% year-on-year (y-o-y) increase in its net profit to Rs 267 crore for the June quarter, led by a strong operational performance. The bank had reported a net profit of Rs 190 crore in the same quarter last year.
The bank’s pre-provisioning operating profit rose 43% y-o-y to Rs 618 crore as a result of a 48% y-o-y increase in both net interest income (NII) and non-interest income to Rs 817 crore and Rs 481 crore, respectively. NII is the difference between interest earned and interest paid out by a bank.
The net interest margin (NIM) improved 7 basis points (bps) sequentially to 4.3%, helped by a marginal increase — 2 bps sequentially — in yield on advances to 12%. The cost of funds remained unchanged at 6.8% as compared to the previous quarter.Advances grew 35% y-o-y in the latest quarter to Rs 56,836.7 crore, against Rs 42,198.1 crore in the same quarter last year.
Vishwavir Ahuja, managing director and chief executive officer, said the bank has seen an all-round growth in all business segments. “Wholesale portfolio grew 28% y-o-y; retail assets grew 62%, led by a 129% growth in credit cards, and the MSME loan book grew 65% y-o-y,” he said. Wholesale/corporate loans constituted 54% of total advances, while the retail segment accounted for 46%, Ahuja added.
The asset quality remained stable as the gross non-performing asset (GNPA) ratio stood at 1.38% in Q1FY20, unchanged from the March quarter. The net NPA ratio fell 4 bps quarter-on-quarter (q-o-q) to 0.65%.
However, the bank said it is cautious about some of its corporate exposure slipping into the stressed asset category in coming quarters. Indicating some challenges in the near term, Ahuja said, “Given the difficult environment, we do expect some of our advances to fall into NPAs.” The anticipated slippages are likely to come from the bank’s exposure to three-four corporates, which adds up to nearly `1,000 crore, or 1.7% of the bank’s total advances.