“We remain watchful, conservative and yet agile. We will look scale up in segments in which we have domain expertise like micro finance and credit cards and also expand in secured businesses like housing finance, tractor and two wheeler loans,” CEO Vishwavir Ahuja stated even because the financial institution stepped up provisions to cowl from stress rising from its unsecured bank cards, micro finance loans and loans to small enterprises which have all been hit by the devastation on livelihood brought on by the Covid 19 pandemic.
The financial institution’s web revenue fell 34% 12 months on 12 months as a result of a fall in net interest income (NII) as a result of reversals in curiosity revenue after the Supreme Court ordered banks to refund compounded curiosity on loans throughout the first six months of the fiscal 12 months.
NII or the distinction between curiosity earned on loans and that paid on deposits fell 11% to Rs 906 cr within the quarter ended March 2021 from Rs 1021 cr a 12 months earlier because the financial institution needed to reverse Rs 85 crore in curiosity revenue throughout the quarter. As a consequence web revenue fell to Rs 75 crore from Rs 114 crore a 12 months earlier.
An increase in provisions for careworn loans particularly from the retail ebook additionally hit web revenue. Provisions rose 27% to Rs 766 crore from Rs 601 crore a 12 months in the past and was increased than the 610 crore reported within the quarter ended December 2020 because the financial institution stepped up buffers to take care of the seemingly impression of the financial disruption brought on by the second wave of the Covid pandemic.
“We have taken accelerated provisions for unsecured loans like credit cards, micro finance and loans to enterprises and increased our coverage to 50% of these loans which are due for more than 180 days compared to 25% we used to do earlier,” CEO Ahuja stated.
More than 80% of the slippages that the financial institution noticed throughout the quarter had been from retail loans that are principally unsecured. Retail loans nonetheless, remained the expansion engine for the financial institution, rising 13% 12 months on 12 months at the same time as company loans shrunk 11%.
Higher price revenue helped the financial institution throughout the quarter. Total non curiosity revenue elevated 37% to Rs 688 crore in March 2021 from Rs 501 crore a 12 months earlier primarily as a result of revenue earned from bank card charges.
Net curiosity margin or the yield earned by the financial institution on loans and curiosity it paid on deposits fell to 4.17% in March 2021 from 4.93% a 12 months earlier as curiosity reversals and price of holding greater than enough liquidity buffers damage.
Ahuja stated that the financial institution is now increasingly comfident of its company ebook as it’s “right sized and adequately provided” with near 80% of loans to firms rated A- and above.
“We have seen a 4% growth in the corporate book versus December. This book has been degrowing since December 2019 and now we think it will grow. While we didnt expect the impact of the pandemic to be so severe a year ago, we have fortified out balance sheet and are closely monitoring the second wave,” Ahuja stated.
Gross NPAs elevated to 4.34% in March 2021 from 3.62% a 12 months in the past. Though decrease than the 4.57% performa gross NPA reported in December 2020.
RBL Bank has restructured loans of 56,113 accounts totalling Rs 467 crore for which it supplied Rs 102 crore.