RBL Bank net profit declines 54% to Rs 114 cr in March quarter; bad loan provisions spike manyfold

New Delhi: RBL Bank on Thursday reported a 54 percent decline in its net profit to Rs 114 crore for the March 2020 quarter, as the provisioning for bad loans spiked manyfold.

The private sector lender had registered a net profit of Rs 247 crore in the corresponding quarter of the previous financial year. Sequentially, the bank posted a net profit of Rs 70 crore in the third quarter ended December 2019.

Its total net income, however, grew 33 percent to Rs 1,522 crore in the January-March 2020 period, from Rs 1,148 crore earned in the corresponding period of 2018-19, RBL Bank said in a regulatory filing.

The bank’s net interest income jumped 38 percent to Rs 1,021 crore, compared with Rs 739 crore a year ago.

The net interest margin (NIM), which is the difference between interest earned and expended, was at a new all-time high of 4.93 percent in the fourth quarter of 2019-20, a rise of 42 basis points as against 4.56 percent in the year-ago quarter.

#4QWithCNBCTV18 | RBL Bank Q4
Net profit stands at Rs 114 cr.

Deposits fall 8% to Rs 57,812 cr Vs Rs 62,907 cr (QoQ) pic.twitter.com/n9tL7kU0yn

— CNBC-TV18 (@CNBCTV18Live) May 7, 2020

For the full year 2019-20, the lender posted a fall of 42 percent in its net profit to Rs 506 crore as against Rs 867 crore. Income, however, jumped by 39 percent to Rs 5,540 crore from Rs 3,982 crore.

The bank’s net advances at the end of March 2020 grew by a modest 7 percent to Rs 58,019 crore, whereas deposits fell 1 percent to Rs 57,812 crore. Sequentially, both the advances and deposits were down by 3 percent and 8 percent, respectively.

Its asset quality showed deterioration with gross non-performing assets (NPAs) rising to 3.62 percent of the gross advances by the end of March 2020, from 1.38 percent a year ago.

Net NPAs also spiked to 2.05 percent from 0.69 percent.

During the quarter under review, bad loan provisioning and contingencies were raised manyfold to Rs 614.08 crore as compared with Rs 199.97 crore in the year-ago period.

The board of directors at its meeting on March 17 approved an interim dividend of Rs 1.50 per share for the current year. In the previous year, the full and final dividend was Rs 2.70 per share. The bank did not declare a final dividend for the current financial year pursuant to the Reserve Bank of India’s (RBI) circular in April 2020 directing all banks not to make any further dividend pay-outs from the profits pertaining to the financial year ended March 31, 2020, until further instructions, it said.

On COVID-19, it said the extent to which the pandemic will impact the bank’s provision on assets will depend on future developments, which are highly uncertain, including new information concerning the severity of the COVID-19 pandemic and any action to contain its spread or mitigate its impact whether mandated by external authorities or by the bank.

As per the RBI, the bank is granting a three-month moratorium on equated-monthly instalments to all eligible borrowers for the March 1-May 31 period, it added.

The bank reiterated that it is well capitalised with has sound liquidity.

“Overall capital adequacy at 16.45 percent with common equity tier-1 ratio of 15.33 percent at the end of FY20 and average liquidity coverage ratio is at 161 percent for Q4FY20,” RBL Bank said.

Shares of RBL Bank on Thursday closed 2.46 percent down at Rs 128.90 apiece on the BSE.