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RBL Bank Q4 results: Net profit sinks 34% YoY, misses estimates; asset quality improves

MUMBAI: today reported a 34 per cent year-on-year decline in net profit to Rs 75 crore, which was below analysts’ estimates. The decline in profit was largely on account of higher provisioning in the quarter.

The lender’s net interest income in the quarter slumped 11 per cent on-year to Rs 906 crore, which was also below Street’s estimates.

However, the lender reported an improvement in asset quality for the quarter. The bank’s gross non-performing assets ratio was at 4.34 per cent as against 4.57 per cent on a proforma basis a quarter ago. Similarly, net NPA ratio stood at 2.12 per cent as against 2.52 per cent a quarter ago.

Operating performance in the quarter was firm as pre-provision operating profit rose 17 per cent on-year to Rs 877 crore. However, net interest margin contracted 70 basis points on-year to 4.2 per cent due to reversal of interest income on slippages.

The lender said that slippages from the BB and below rated loan book were at 10 per cent in the previous financial year but it expects to revert to normal trend of 5-7 per cent in 2021-22.

The asset quality of business loans deteriorated in the quarter to 1.85 per cent from 1.75 per cent a quarter ago on a pro forma basis. At the same time, the quality of retail books improved to 2.49 per cent from 2.82 per cent.

The lender registered a 26 per cent growth in deposits to Rs 73,121 crore but loan book grew merely 1 per cent to Rs 58,623 crore. The muted loan growth performance was largely due to the 12 per cent decline in wholesale book, whereas the retail loan book surged 13 per cent.

Shares of RBL Bank ended 0.9 per cent higher at Rs 182.9 on the National Stock Exchange.

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