RBL Bank reports Q1 net profit at Rs 201 crore; asset quality improves

RBL Bank on Thursday reported a profit after tax of Rs 201.16 crore in the April-June quarter (Q1FY23) as against a net loss of Rs 459.7 crore in the year-ago period as sharp drop in provisions boosted the private lender’s bottomline.

Sequentially, the bank’s net profit rose 1.7 per cent from Rs 197.83 crore in Q4FY22.

In the April-June quarter, RBL Bank’s net interest income stood at Rs 1,027.73 crore, six per cent higher than Rs 969.5 crore a year ago. The net interest income is the difference between interest earned and interest expended. The bank’s net interest margin was at 4.36 per cent in Q1.

For the quarter under review, the private lender’s operating profit before provisions and contingencies stood at Rs 529.12 crore, lower than Rs 766.14 crore year-on-year (YoY) and Rs 657.42 crore seen in the previous quarter.

The total income in the April-June period was largely steady at Rs 2,702.91 crore as against Rs 2,679.19 crore in the corresponding period last year.

In the first quarter, RBL Bank’s provisions and contingencies other than taxes plummeted 81 per cent YoY to Rs 253 crore as against Rs 1,384.36 crore as on June 30, 2021.

“The asset quality is improving and we expect this to continue. The credit cost is seen sharply lower this year, and we don’t envisage any equity capital for at least the next 18-24 months,” R Subramaniakumar, managing director (MD) and chief executive officer, RBL Bank, said in an earnings call.

With the bank expecting a sharp drop in credit cost in the remainder of the current financial year, Subramaniakumar said the overall credit growth for the year was expected in the range of 15-18%. Within this, the retail credit growth is seen at 20-25 per cent, he added.

The previous quarter marked the first one since Subramaniakumar took charge of the private bank. The shares of the lender have witnessed a bout of volatility after the abrupt exit of former MD Vishwavir Ahuja in December 2021, sparking concerns about RBL Bank’s financial position.

In 2022, so far, the shares of RBL Bank have dropped 33 per cent.

“Our focus would be to consolidate, leverage and optimise our existing platform so as to accelerate profitable growth of the balance sheet. We will continue to focus on our key niche areas of cards and microfinance, while accelerating the diversification across more retail products,” Subramaniakumar said.