RBL Bank’s net profit in Q2 falls by 78 pc as asset quality declines
Private-sector lender RBL Bank on Thursday announced a 78% drop in its September quarter net profit to Rs 31 crore due to an increase in asset quality issues, but turned towards a better second half with better ratios.
Its managing director and CEO, Vishwavir Ahuja, said the stress that has occurred is better than he expected and oriented. The new slips amounted to Rs 1,217 crore, the bulk of which came from the microfinance wallet and credit card wallet, which had been hit due to the second wave.
The gross ratio of non-performing assets increased to 5.40% from 3.34% in the previous year and 4.99% in the previous quarter. ” We took a bump this quarter. GNPAs have peaked and will trend lower from now on. We expect the costs of credit in the second half of the year to be half of what we observed in the first, ” Ahuja told reporters.
Overall provisions have risen from Rs 651 crore to Rs 487 crore in the period last year and to Rs 1,384 crore in the previous quarter. The bank, which holds 3 percent of the assets under overhaul, is confident it will handle the stress and will also improve the provision coverage ratio to 65 percent from 62 percent currently.
Core net interest income declined 2 percent to Rs 915 crore as there was an interest reversal of Rs 130 crore previously charged to retail accounts which then led to a reduction of the net interest margin at 4.07 percent, while global lending is stable. Non-interest income jumped 42% to Rs 593 crore on growth in commission income and Ahuja hoped he would do well when credit card issuance resumes after impact due to restrictions on Mastercard.
Ahuja said that credit growth is now accelerating across all segments and the bank will close fiscal year 22 with advance growth of 7-8%. The wholesale ledger grew 4% in October alone, as improved collection efficiency led to a restart of micro-loan disbursements, he said, adding that the pillar of retail credit cards saw 2 lakh new cards issued in October. He also announced that the bank has decided to limit the overall exposure to microfinance to less than 10 percent of the overall portfolio from the previous level of 15 percent, which is learning from the current crisis. The bank certificate closed down 3.10% at Rs 201.40 a piece on the BSE on Thursday, against a correction of 1.89% on the benchmark.
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