RBL Bank is one of India’s fastest-growing private sector banks with an expanding presence across the country. The bank offers specialized services under six business verticals namely: Corporate & Institutional banking, Commercial banking, Branch & Business banking, Retail Assets, Development banking and Financial Inclusion, Treasury, and Financial Markets Operations. It currently services over 8.49 million customers through a network of 386 branches, 1,245 business correspondent branches (of which 263 banking outlets), and 389 ATMs spread across 28 Indian states and Union Territories.
The share price of RBL Bank Ltd touched an intraday high of ~4% to Rs 137 ahead of its result on 7th May 2020. The results were declared post market hours.
The bank's net interest income (NII) rose by 11% sequentially and 48% YoY to Rs 1,094 crores during Q4FY20. NII for FY20 rose by 53% YoY to Rs 3,894 crores from Rs 2,541 crores in FY19. The net interest margin (NIM) for Q4FY20 was 4.93% as compared to 4.23% in Q4FY19. For FY20 the NIM stood at 4.56% versus 4.14% in FY19.
The Non-Interest income for Q4FY20 was 1,910 crores, an increase of 32% on a YoY basis of which core fee income grew 29% YoY to Rs 1,743 crores. Non-Wholesale fees constituted 73% of the Bank’s total fee income.
Gross non-performing assets (NPAs) saw a rise of 3.62% as compared to 1.38% in the same period in Q4FY19. In absolute terms, the gross NPA figure for the March quarter stands at Rs 2,137 crores as compared to Rs 755 crores in Q4FY19, a rise of over 180%. On a sequential basis, the performance of the gross NPA figure has increased by 6%.
The net NPA of the bank stood at 2.05% as compared to 2.07% in Q3FY20 and 0.69% in Q4FY19. The provision coverage ratio (PCR) has improved to 64.04% as compared to 58.07% in Q3FY20. The restructured standard assets portfolio was 0.08% as of 31st March 2020 from 0.06% as of 31st December 2019.
The lender has made provisions of Rs 614 crores in the quarter ended on March 31, 2020, as compared to Rs 200 crores in Q4FY19. Sequentially, the bank has set aside Rs 637 crores in December quarter as provisions. Slippages during the quarter stood at Rs 700 crore in the fourth quarter compared to Rs 1,050 crore in the previous quarter.
As of 31st March 2020, the Bank’s balance sheet grew 11% YoY and stood at Rs 88,978 crores as on 31st March 2020. The total deposits reduced by 1% YoY and stood at Rs 57,812 crores. CASA deposits grew by 17% YoY & 2% QoQ to Rs 17,116 crores. The share of Retail Term Deposits and CASA in the Total Deposits was 59% as of 31st March 2020.
The bank’s advances grew 7% YoY to Rs 58,019 crores as on 31st March 2020. Non-Wholesale advances grew 35% YoY to Rs 32,525 crores and accounted for 56% of the net advances of the Bank. Within non wholesale advances, Retail Assets grew 41% to Rs 23,181 crores and DB & FI grew by 23% to Rs 9,343 crores.
At the end of March 2020, the bank's Total Capital to Risk (Weighted) Assets Ratio (CRAR) is at 16.4% as compared to 13.5% in the previous quarter ended in March 2019.
Overall, the lender's operating profit for the quarter was Rs 765 crores, up 37% YoY from Rs 560 crores in Q4FY19. The bank registered a profit of Rs 114 crores which was down 54% YoY from Rs 247 crores.
“The bank has demonstrated strong growth in operating profits amidst an unprecedented and challenging business environment. In this backdrop, we will continue to be cautious, conservative, and focused on the preservation of the franchise. As a bank, we will look to maintain surplus liquidity high capital levels, tighten risk filters further to manage and improve credit quality, and balance sheet protection. A lot of this was already happening with the macro situation pre-COVID but the current environment has made it all the more important. We continue to maintain healthy liquidity. Deposit traction is gaining momentum again and our deposits are now higher than March 31 levels and in excess of Rs 60,000 crores as of April end" said Vishwavir Ahuja, MD & CEO, RBL Bank.
He further said that the one-third of bank's loan book by value is under the 3-month moratorium permitted by the Reserve Bank of India. The moratorium was extended to all customers in the agricultural and rural loan portfolio. These customers are expected to return to regular repayments after the moratorium ends. About 13% of the bank’s credit card customers have availed the moratorium and 46% of the retail loan customers have taken the benefit. About 23% of the bank’s wholesale loan book by value is under moratorium.
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