RBL Bank expects 20% loan growth over next 2 years led by retail assets

RBL Bank expects a 20 percent growth in its loan book over the next two financial years, largely led by secured retail assets, its managing director and chief executive officer said in an interview on 24 January.

In an interview with Reuters, R Subramaniakumar said, “We are trying to get into areas which are futuristic ... and have a better management of the capital.”

"We have forayed into areas like gold and housing loans where the risk weight is fairly less and capital adequacy is going to be taken care of," he added.

The Reserve Bank of India's move to raise the risk on unsecured loans impacted RBL Bank's capital adequacy ratio by 70 points, Subramaniakumar said.

The lender is aiming to grow its credit card book around 23-25% going forward, from 29% in the October-December quarter, he added.

The Mumbai-headquartered bank reported a 20 percent growth in loans on-year, while deposits grew by 13 percent. The bank's retail loans grew 33 percent year-on-year.

Subramaniakumar said the bank does not envisage any pressure on deposits and its deposit rates have peaked.

Recently, on 20 January, RBL Bank reported an 11 per cent increase in its profit to ₹233 crore in the third quarter ended in December 2023. The bank had earned a net profit of ₹209 crore in the same quarter a year ago. Total income increased to ₹3,969 crore during the quarter under review against ₹3,116 crore in the same period last year, RBL Bank said in a regulatory filing. Interest income of the bank also improved to ₹3,191 crore during the quarter compared to ₹2,498 crore in the same period a year ago.

Coming back to Subramaniakumar's interview with Reuters, he said, NIM will increase by a few basis points every quarter in 2024-25.

According to Subramaniakumar, the lender is also considering its options with regard to its exposure to alternate investment funds (AIF), and this exposure is fully covered by the central bank's mandate. RBL Bank's investments in AIF have a net asset value of 1.61 billion rupees ($19.38 million), he added.

(With inputs from Reuters)