RBL Bank
conducted a concall on 19 January 2024 to discuss the financial results for the
quarter ended December 2023 and prospects of the bank. R Subramaniakumar,
MD&CEO of the bank addressed the call:
Highlights:
The
operating performance of the bank is in line with the guidance in Q3FY2024. The
advances increased 20% yoy and 5% qoq to Rs 79949 crore end December 2023.
Advances
and deposits have experienced robust growth with granularity of both sides of
Balance Sheet catching pace.
The
retail segment continues to grow faster with the focus on granularity. The
deposits have surged 23% yoy and 5% qoq.
ROA and
ROE expansion is on track and the profitability is healthy.
Retail advances
grew at faster pace by 33% yoy and 5% qoq to Rs 46371 crore. The retail:wholesale
mix was 58:42 end December 2023.
Retail disbursements
was Rs 5958 crore for Q3FY24, of which Rs 2631 crore was towards new secured
retail products.
The
wholesale loan book has increased 6% yoy and 4% qoq end December 2023.
The
disbursements in the microfinance segment was steady sequentially at Rs 1989
crore as the bank has decided to go slow due to election in some states. The
bank sees normalcy returning in the microfinance loan book in Q4FY2024.
The
bank has issued 5.75 lakhs new credit cards in Q3FY2024. The bank is looking at
diversifying its sourcing channel for cards. The bank has reduced the share credit
card sourcing externally to 65% and expects to further reduce it to 50% going
forward
Total deposits
grew 13% yoy and 3% qoq to Rs 92746 crore. CASA Ratio at 33.8% end December
2023.
Deposits
less than 2 crore grew 23% yoy to Rs 41275 crore with its share rising to 44.5%
of total deposits. The bank aims to further raise the share of deposits below
Rs 2 crore to 50% in next couple of quarters.
Average LCR
for the quarter was 132% end December 2023.
Gross NPA
ratio was steady at 3.12% and Net NPA ratio was 0.80% end December 2023.
Provision
Coverage Ratio including Technical Write-off was 89.3% end December 2023.
As per RBI
directions dated 19 December 2023, the bank has created contingent provision of
Rs 115 crore on AIF investments.
AIF
investments were primarily into venture debt fund made over years for building
inroads into new digital age businesses. The Bank has been working with these debt
funds for 10 years and it has not witnessed any challenges in realizing its
principle.
The
investments are in the money and the bank does not see any concern.
Excluding
this contingent provision, net Profit grew 53% yoy and 9% qoq to Rs 319 crore
as against the reported net profit rising 12% yoy to Rs 233 crore in Q3FY2024.
Excluding
this contingent provision, ROA was 1.03% against reported ROA of 0.75% for
Q3FY24.
The
bank has raised the retail direct sourcing locations to 185 locations from 68 locations
earlier. The bank plans to add another 51 locations in next 2 quarters.
The
bank has expanded its presence to 12 states from 9 states last year.
The net
restructured loan book of the bank has declined to 0.63% from 0.89% a quarter
ago.
Net
interest margin was marginally lower at 5.52% on account of slow disbursement
in the microfinance segment.
The
cost of funds as increased 10 bps in Q3FY2024. The bank expects to maintain
stable margins in Q4FY2024.
The
operating expenses increased on account of higher business volumes and team
expansion.
Overall
Capital Adequacy was 16.4% with CET 1 was 14.6% end December 2023.
The
bank had impact of 57 bps on CET 1 and 65 bps on overall capital adequacy ratio
due to the regulatory changes on higher risk weights.
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