RBL Bank, a private lender based in Mumbai, showcased an impressive performance in the first quarter ended June 2023, reporting a substantial 43.2% surge in net profit, reaching Rs 288 crore. This remarkable growth was attributed to lower provisions and higher interest income, continuing the bank’s strong showing from the previous quarter (Q4 FY23), where net profit stood at Rs 271 crore, marking a significant 36.8% increase year-on-year. The Profit After Tax (PAT) also rose by 30% on a quarter-on-quarter basis.
A key driver of RBL Bank’s robust Q1 results was the growth in its core income, represented by the Net Interest Income (NII). The NII, the difference between interest earned and interest paid, registered an impressive 21% year-on-year and 3% quarter-on-quarter rise, reaching Rs 1,246 crore. This growth in NII was accompanied by a net interest margin of 4.84% for the quarter, indicating the bank’s efficient management of its interest-related earnings and expenses.
The bank’s operating profit witnessed a strong growth of 22% year-on-year and 9% quarter-on-quarter, amounting to Rs 647 crore. The total revenue also recorded significant growth, increasing by 18% year-on-year and 2% quarter-on-quarter, reaching Rs 1,932 crore.
In terms of asset growth, RBL Bank’s gross advances increased by 20% to Rs 74,792 crore during the June quarter, while deposits grew by 8% to Rs 85,638 crore. Deposits in the bank’s current and savings accounts also experienced a positive trend, rising by 12% year-on-year to Rs 31,927 crore. However, the CASA ratio, indicating the proportion of a bank’s deposits in current and savings accounts to its total deposits, decreased slightly by 10 basis points sequentially to 37.3%.
While the CASA ratio experienced a slight dip, RBL Bank’s asset quality remained stable. The gross non-performing assets (NPAs) as a percentage of total loans were estimated to be between 3.2% to 3.3% for the June quarter, showing improvement from 3.7% in the previous three months. The net NPAs remained flat sequentially at 1.1%.
R Subramaniakumar, the MD&CEO of RBL Bank, expressed his satisfaction with the bank’s performance, stating that they have commenced the financial year 2023-24 with strong operating performance across all parameters. The bank witnessed healthy advances growth, particularly in the retail segment, and saw further improvement in granular deposits, aligning with their laid-out strategy. Revenue growth outpaced operating expenses, driven by optimizing certain cost lines, leading to robust growth in operating profits and PAT.
On July 21, RBL Bank’s stock closed at Rs 221.70, showing a 0.93% increase from the previous close.
In conclusion, RBL Bank’s Q1 FY24 results demonstrate its resilience and ability to achieve significant profit growth while effectively managing its interest income and expenses. The bank’s focus on prudent risk management, advances growth, and deposit mobilization has contributed to its strong performance. As the financial year progresses, the bank’s strategic approach to maintaining asset quality and furthering growth will be closely monitored by stakeholders and investors to gauge its overall performance and prospects in the competitive banking landscape.
RBL Bank’s exceptional Q1 FY24 performance reflects its proactive approach to growth and risk management. The bank’s surge in net profit, aided by higher interest income and lower provisions, highlights its ability to capitalize on market opportunities. With a robust net interest income and net interest margin, the bank showcased efficient management of its interest-related earnings. Notably, RBL Bank’s asset quality remained stable, with a decline in gross NPAs as a percentage of total loans. As the bank continues to focus on granular deposits and cost optimization, its strong operating performance positions it well to navigate the evolving economic landscape.