RBL Bank's Q3 results: Net profit jumps 34% YoY on firm NII growth

RBL Bank on Friday reported a 34 per cent year-on-year increase in its October-December standalone net profit to Rs 209 crore as strong growth in net interest income bolstered the private lender’s bottomline.

On a sequential basis, the private bank’s net profit registered 4 per cent growth from Rs 201.55 crore in July-September.

In October-December, RBL Bank’s net interest income grew 13.6 per cent year-on-year to Rs 1,148 crore. The net interest income is the difference between interest earned and interest expended.

For the quarter under review, RBL Bank’s net interest margin was at 4.74 per cent, up from 4.34 per cent the same time a year ago and 4.55 per cent in July-September.

As on December 31, 2022, RBL Bank’s total advances were at Rs 66,684 crore registering a growth of 15 per cent year-on-year.

Of the total advances, retail loans were at Rs 34,977 crore as on December 31, up 13 per cent year-on-year.  Within the retail mix, credit cards accounted for 23 per cent of advances, microfinance for 8 per cent of loans while housing, rural and small business loans made up 8 per cent of advances.

Deposits grew 11 per cent on-year and were at Rs 81,746 crore as on December 31.  Over the last few months, banks have raised deposit rates sharply in order to mobilise funds as credit growth remains well above deposit growth. RBL Bank’s top management, however, expects the lender’s interest margins to remain healthy going ahead.

“Business growth, driven by granular advances and deposits growth, continues to improve, in line with our strategy and execution. Our initiatives over the last six months on new product launches, and scale up of granular retail products are also starting to bear fruit. As these products scale up, we expect growth to become more broad based,” R Subramaniakumar, MD, CEO, RBL Bank said.

Current Account Savings Account (CASA), which represent low cost deposits, were at Rs 29,948 crore as on December 31, 2022 up 18 per cent on year. The CASA ratio was at 36.6 per cent versus 34.4 per cent as on December 31, 2021.

In October-December, RBL Bank’s bottomline also received a boost from a decline in provisions as the lender reported an improvement in asset quality.

Provisions were at Rs 293 crore in October-December, 31 per cent lower than Rs 424 crore a year ago. As on December 31, the bank’s gross non-performing asset ratio was at 3.61 per cent, lower than 3.80 per cent a quarter ago and 4.84 per cent a year ago.

The net NPA ratio was at 1.18 per cent as on December 31, lower than 1.26 per cent a quarter ago and 1.85 per cent a year ago.

As on December 31, 2022 the bank’s provision coverage ratio including technical write offs was 84.7 per cent vs 84.3 per cent as on September 30, 2022.

The bank’s capital to risk weighted assets ratio was at 17 per cent as on December 31, while Common Equity Tier-1 was at 15.5 per cent.