RBL Bank Q4 Results: Net Profit Jumps 30% YoY On Rise in Other Income
RBL Bank's net profit surges by 30% to Rs 353 crore in Q4 FY24, marking a significant improvement from the previous year.
RBL Bank Ltd. reported a 30% growth in its standalone net profit to Rs 353 crore in the March quarter, driven by a jump in other income, according to a regulatory filing on Saturday.
Analysts polled by Bloomberg had pegged the bottom line at Rs 322.11 crore for the quarter.
On a sequential basis, the net profit of the private lender grew 50%.
Other income rose 30% on year to Rs 875.5 crore in the quarter under review. Of this, core fee income grew 26% on year to Rs 829 crore.
Other income includes commission income from non-fund based banking activities, fees, earnings from foreign exchange and derivative transactions, and profit and loss (including revaluation) from investments.
"Our focus, in short and medium term, will continue to be - improving profitability, maintaining and improving asset quality, and focusing on principle growth to granular advances and deposits," R Subramaniakumar, managing director and chief operating officer of the bank said in a post-earnings media call.
The bank's continued focus is on strengthening cross-sell of products, and improving digital platforms for better customer engagements and acquisition, Subramaniakumar added.
RBL Bank Q4 FY24 Results Highlights
Net profit up 30% to Rs 353 crore vs Rs 271 crore (YoY).
Net interest income up 18% to Rs 1,600 crore vs Rs 1,357 crore (YoY).
Gross NPA at 2.65% vs 3.12% (QoQ).
Net NPA at 0.74% vs 0.80% (QoQ).
The net interest income, or core income, rose 18% year-on-year to Rs 1,600 crore in Q4. The net interest margin stood at 5.45% as on March 31, from 5.62% in the corresponding quarter a year ago. In Q3, the NIM stood at 5.52%.
Subramaniakumar expects margins to stay in the same range in the near future.
Bank's operating expenses rose 10% on yearly basis to Rs 4,214 crore in the March quarter, out of which expenses barring employee costs rose 12% on year to Rs 1,210 crore. The rise in other operating expenses was on account of significant accounting policy changes related to loan servicing fees to business correspondents.
Cost-to-income ratio was at 64.2% in Q4, against 67.1% in Q3 and 70.8% in Q4FY23.
Credit costs stood at 53 basis points as on March 31, from 48 bps in the previous quarter. This includes contingent provisions of Rs 114 crore against the bank's exposure to alternative investment funds set aside in the last quarter.
The provision coverage ratio was at 72.7% as on March 31. The bank's gross slippage ratio came in at 0.86%, from 0.88% in the previous quarter. The slippage numbers are dominated by unsecured loans like credit cards and microfinance, but "the trend is coming down," the management said. The gross slippage in credit cards and microfinance loans were at 6-7% in Q4.
The bank's deposits grew 22% during the quarter to Rs 1.03 lakh crore. Out of this, deposits less than Rs 2 crore, which make for 42.3% of total deposits, grew 24% to Rs 43,753 crore on yearly basis. This "continues to accrete well," Subramaniakumar said. The CASA ratio came in at 35.2% as on March 31.
Advances during the quarter grew 20% on yearly basis, and 5% sequentially to Rs 83,987 crore in the quarter under review, driven by a 30% on year growth in retail advances. Retail disbursements of Rs 6,163 crore in Q4, include disbursements worth Rs 2,009 crore towards new secured retail products.
"We expect a steady growth in advances in the range of 20%, with retail driving credit expansion especially in new segments at scale. We see opportunity to build scale in commercial banking space," Subramaniakumar said.
The bank's retail and wholesale mix stands at 59:41.
Further, Subramaniakumar said that over the last couple of years, the bank's continued efforts have helped stabilise technology infrastructure. This has resulted in substantial reduction in customer complaints. "We have initiated operational automation, process simplification along with IT infra enhancements to achieve operational efficiencies and meet the scale of business growth," Subramaniakumar added.
RBL Bank's liquidity coverage ratio was at a healthy 140% for the quarter, helped by strong deposit growth which had some impact on margin.
Well capitalised for medium-term growth, the bank's capital adequacy ratio of 16.18% and CET-1 ratio at 14.38% for the quarter.
RBL Bank board recommends a dividend of Rs 1.5 per share, subject to shareholders' approval.