RBL Bank conducted a concall on 22 July 2023 to discuss the financial results for the quarter ended June 2023 and prospects of the bank. R Subramaniakumar, MD&CEO of the bank addressed the call:

Highlights:

The loan book of the bank has increased 21% yoy and 4% qoq end June 2023. Retail advances have surged 34% yoy.

Despite the first quarter being the weak quarter, the bank sustained the strong growth momentum in the retail businesses.

The bank expects to maintain 5 to 6% quarterly growth in the retail advance.

Retail disbursements other than cards were at Rs 4100 crore in Q1FY2024. Microfinance disbursements were strong at Rs 2150 crore and housing 700 crore.

The bank has issued 6.3 lakh crads in Q1FY24.

The deposit increased 8% yoy and 1% on sequential basis end June 2023. The deposit below Rs 2 crore accounted for 40% of the deposits.

Growing granular deposits continuous to be the key focus area of the bank.

The bank has improved RoA to 1.01% in Q1FY2024 and the focus is on improving upon this performance going forward. The exact RoA will be 1.2% for FY24.

The fresh slippages of loans were at Rs 555 crore. About 32% of slippages came from the wholesale segment. The microfinance slippages were at Rs 41 crore, cards Rs 312 crore, other retail Rs 170 crore etc.

The restructured loan book of the bank has declined to 1.05% end June 2023 from 1.21% end March 2023.

The recoveries in written off accounts were at Rs 65 crore in Q1FY24.

The bank has created overall credit related provisions of Rs 325 crore in Q1FY24.

The credit cost stood at 39 bps in Q1FY2024.

The credit cost is expected to be at 1.5-2% for FY 2024 and it will be mostly at the bottom end of the guidance range.

The repricing in the long term deposits rates has led to sequential decline in the net interest margins. The bulk of the repricing has happened in Q1 and some of the repricing will happen in Q2FY24.

The bank expects the NIMs to move up from here on.

The bank expects cost to income ratio to marginally trend upward for next couple of quarter before going down significantly.

Bank is targeting 20-22% growth in the overall advances and 30-35% growth in the retail advances for FY2024.

The bank is expecting 10-20% bps increase in cost of deposes while yield on advances will improve higher.

The bank is looking at add 70-80 branches in FY2024.

The bank is well capitalized and it is not in a hurry to raise capital.