RBL Bank Q2 Result | Profit jumps over 6 times to Rs 202 crore on low base

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Midcap private sector lender RBL Bank on October 22 reported a standalone profit of Rs 201.55 crore for the September quarter of FY23, growing 6.5 times from the year-ago period on a low base. The profit in Q2FY22 was hit by higher provisions for bad loans, while the growth was almost flat sequentially.

The lender's net interest income (NII) grew 16 percent year-on-year to Rs 1,064 crore during the July-September, with net interest margin rising 49 bps YoY to 4.55 percent, the bank told exchanges. The sequential growth in net interest income was 3.6 percent and NIM expanded 19 bps.

The bank reported 12 percent year-on-year credit growth at Rs 62,942 crore during the quarter, while deposits increased by 5 percent to Rs 79,404 crore.

There was a considerable decline in provisions and contingencies at Rs 241 crore, a YoY drop of 26 percent and 3 percent on a sequential basis.

The bank also reported a decline in other income or non-interest income, which slipped 2 percent on-year and 5 percent sequentially to Rs 583 crore in the September FY23 quarter.

The pre-provision operating profit also dropped in double-digit - by 26 percent year-on-year to Rs 512 crore for the quarter, and the sequential fall was 3 percent.

On the asset quality front, gross non-performing assets as a percentage of gross advances improved to 3.80 percent for the September FY23 quarter, down 28 bps sequentially, but there was a 10 bps QoQ increase in net NPA at 1.26 percent, the bank said.

The provision coverage ratio including technical write-offs dropped to 84.3 percent as of September FY23, down from 85.3 percent in the previous quarter, but improved from 76.6 percent YoY.

In the first half of FY23, RBL Bank recorded a standalone profit of Rs 403 crore against a loss of Rs 429 crore in the same period last year, with a significant fall (76 percent YoY) in provisions and contingencies at Rs 494 crore.

Net interest income for the April-September FY23 period at Rs 2,092 crore grew by 11 percent over the corresponding period last fiscal.

"We have completed H1 FY23 on a satisfactory note on all fronts. H1FY23’s profitability over H1FY22 is substantially improved," R Subramaniakumar, MD & CEO of the bank said.

Subramaniakumar further said the advances growth was starting to gain momentum and the bank expects to see this continue. "Granular deposit growth is picking up momentum and asset quality continues to be stable, with gross non-performing assets also trending down over earlier periods."