The management commentary also pointed towards some weakness going ahead due to tight liquidity concerns, which dented investors sentiment and resulted into sharp fall in stock price.
Private sector lender RBL Bank continued its strong earnings run with double-digit growth across key parameters in June quarter, albeit elevated provisions limited profitability.
Profit grew 41 percent YoY to Rs 267 crore in Q1FY20, driven by strong NII, operating and other income
Net interest income, the difference between interest earned and interest expended, increased 48 percent to Rs 817.3 crore YoY with net interest margin being at an all-time high of 4.3 percent and healthy loan growth at 35 percent.
Net interest margin in March quarter was 4.2 percent and loan growth on sequential basis stood at 5 percent.
The bank reported earnings in line with street expectations. Profit was expected to be Rs 260 crore and net interest income Rs 788.4 crore, according to a CNBC-TV18 poll estimates.
Asset quality remained stable in Q1 as gross non-performing assets stood unchanged at 1.38 percent of gross advances and net NPA fell 0.65 percent against 0.69 percent on sequential basis.
But slippages remained high at Rs 225 crore at the end of June quarter against Rs 206 crore in Q4FY19. Even write-offs were higher at Rs 147 crore in the quarter gone by, against Rs 91 crore in the previous quarter.
The management commentary pointed towards some weakness going ahead due to tight liquidity concerns, which dented investors sentiment and resulted in a sharp fall in stock price.
The stock was quoting at Rs 539.00, down Rs 40.85, or 7.04 percent on the BSE at 1312 hours.
"The bank has had a good quarter of strong performance and has continued to maintain its growth momentum and improvement in operating metrics. However, given the difficult environment, we do expect to face some challenges on some of our exposures in the near term," Vishwavir Ahuja, MD & CEO, RBL Bank said in a BSE filing.
While addressing a press conference, he said the bank sees a slight deterioration in corporate exposures in the next 2-3 quarters. "Tight liquidity and volatile equity market are impacting the liquidity of some of the clients."
"We could incur additional 35-40 bps credit cost owing to additional provisioning requirements. Gross NPAs could rise to 2.25-2.50 percent over the course of the year, but capital position continues to be comfortable," he said, adding issue is specific to certain corporates, not related to realty and energy.Provisions for bad loans increased 6.6 percent sequentially and 52 percent YoY to Rs 213.2 crore in the quarter ended June 2019, but provision coverage ratio improved to 69.13 percent in Q1FY20 against 65.30 percent in Q4FY19.The Great Diwali Discount!
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