RBL Bank net profit drops 34% due to higher provisioning, lower NII

The capital adequacy ratio (CAR) remained at 17.5% with CET1 ratio of 16.6% at the end of March 2021.

Private lender RBL Bank on Monday reported a 34% year-on-year (y-o-y) drop in net profit to Rs 75 crore as core income declined and provisions rose. The lender’s net interest income (NII) declined 11% YoY to Rs 906 crore. Similarly, provisions rose 25% YoY to Rs 766 crore. Operating profit, however, increased 17% YoY to Rs 877 crore.

Bank’s MD and CEO Vishwavir Ahuja said, “We are closely monitoring the pandemic and its impact on the economy and remain cautiously optimistic of a growth revival as the situation normalises.”

The bank has taken accelerated provisioning of around Rs 85 crore during the March quarter, he added. The provision coverage ratio (PCR) remained at 72.2% during the March quarter, compared to 64% in Q4FY20 and 68.8% in Q3FY21.

The asset quality of the lender improved during the March quarter. Its Gross non-performing assets (NPAs) ratio improved 23 bps to 4.34%, compared to reported proforma gross NPAs of 4.57% in the previous quarter. Similarly, net NPAs ratio improved 40 bps to 2.12% from 2.52% in the December quarter.

Lenders had reported NPAs on a proforma basis during the December quarter due to a standstill from apex court on declaring NPAs RBL Bank’s net interest margin (NIM) declined 76 basis point (bps) YoY and 2 bps sequentially to 4.17%. Its core fee income grew 40% YoY to Rs 660 crore. Overall, other income grew 38% YoY to Rs 688 crore.

Advances grew 4% QoQ and 1% YoY to Rs 58,623 crore. The retail and wholesale mix remained at 59:41 at the end of the March quarter Deposits grew 26% YoY and 9% QoQ to Rs 73,121 crore. Current account savings account (CASA) grew 36% YoY and 11% QoQ to Rs 23,264 crore. CASA ratio stood at 31.8% compared to 29.6% in the March quarter, last year.

The capital adequacy ratio (CAR) remained at 17.5% with CET1 ratio of 16.6% at the end of March 2021.