Home >Companies >Company Results >RBL Bank posts net loss of 459 cr in Q1FY22, NII dips 7%

RBL Bank Limited on Monday posted a net loss 459 crore for the quarter ended 30 June, 2021. The lender had posted a net profit of 141 crore in the year-ago period.

Sequentially, the bank had posted a net profit of 75.34 crore in Q4FY21.

The net interest income for the quarter fell 7% to 970 crore as against 1,041 crore in the corresponding quarter last year. Sequentially, the NII rose 7% from 906 crore.

The lender's Gross Non-Performing Assets (NPA) came at 4.99% in Q1FY22 as against 4.34% in the previous quarter (Q4FY21). The Net NPA fell 2.01% from 2.12% QoQ, RBL Bank said in a regulatory filing.

During the quarter, the bank took additional provision of 604 crore on account of higher slippages in unsecured retail portfolio.

The June-quarter provisions and contingencies came at 1,426 crore as against 5,00 crore a year ago.

The bank's Managing Director and Chief Executive Vishwavir Ahuja said the provisions will take care of all the requirements for the future and added that it would have been in the black if not for the 600 crore of additional money set aside.

The bank, which announced a "transformation" strategy for the future, recognised the provision hit up front as it wanted to get done with the past challenges in a go, he said.

Its overall restructured loans moved up to 1,162 crore in the June quarter from 933 crore in the preceding quarter.

He said the bank will improve from here on and expects to make up for the reverses in the remaining three quarters of the fiscal year. The wholesale book is performing well, and additionally, there was the benefit of loan moratoriums in the year-ago period, he said.

Fresh slippages of 450 crore each came from the microfinance and the credit card portfolios. Ahuja said that the second wave hit loan collections from the micro borrowers' side resulting in the NPAs while on the credit card front, there was stress from the past which resulted in many accounts slipping.

Microfinance loan collections, which had fallen to 79 per cent at the peak of the second wave, were at 88 per cent as of July, the bank said.

The lender is positive about the outlook on the credit card front as well, stating that as the economy recovers and sufficient activity gets generated, performance will improve from the second half of the fiscal.

The bank will be hit by the ban on Mastercard but is confident of being able to get back to selling cards by mid-September and attain the monthly average of 1 lakh new cards being sold, Ahuja said.

For the reporting quarter, the net interest income declined 7 per cent to 970 crore as the loan book remained flat and the net interest margin narrowed sharply to 4.4 per cent from 4.9 per cent in the year-ago period.

The retail fees helped the other income double to 695 crore for the reporting quarter, he said.

On the credit growth front, Ahuja did not give a target but said the overall activity will lift the disbursements. He, however, acknowledged that while it has headroom to grow on the corporate loans side after the clean-up done last year, lending to well-rated corporates may also be less margin accretive.

Its overall capital adequacy improved to 17.15 per cent from 16.14 per cent in the year-ago period.

The "transformation" strategy focuses on right to win areas like credit cards and microfinance where it has its strengths, focusing on branch banking, growing secured retail loans in two-wheelers, home extensions and gold and scaling up its neo-bank offering customers by three times to over 12 million in three years.

RBL Bank's scrip on Monday closed 1.06% higher at 195 on BSE.

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