RBL Bank Q1 Results: Net Profit Surges 43% to Rs 288 Crore on Strong Core Income

RBL Bank, a prominent private lender, reported an impressive 43.2% increase in its net profit for the first quarter that ended in June 2023, reaching Rs 288 crore.
RBL Bank

RBL Bank, a prominent private lender, reported an impressive 43.2% increase in its net profit for the first quarter that ended in June 2023, reaching Rs 288 crore. The bank attributed this remarkable growth to reduced provisions and higher interest income, which bolstered its overall financial performance.

The bank had already showcased strong performance in the previous quarter (Q4 FY23), where its net profit stood at Rs 271 crore, representing a substantial 36.8% rise compared to the same period in the previous year. Moreover, the Profit After Tax (PAT) witnessed an impressive 30% increase on a quarter-on-quarter basis, reaffirming the bank’s upward trajectory.

A significant driver of RBL Bank’s robust Q1 results was its core income, measured by the Net Interest Income (NII), which showed a remarkable 21% year-on-year and 3% quarter-on-quarter growth, amounting to Rs 1,246 crore. The bank also maintained a healthy net interest margin of 4.84% for the quarter.

The bank’s operating profit recorded a noteworthy 22% year-on-year and 9% quarter-on-quarter surge, reaching Rs 647 crore. Additionally, the total revenue of RBL Bank witnessed an 18% year-on-year and 2% quarter-on-quarter increase, totaling Rs 1,932 crore, highlighting the bank’s resilience and adaptability in a dynamic market environment.

In terms of advances and deposits, the bank exhibited promising growth during the June quarter. Gross advances increased by 20% to reach Rs 74,792 crore, while deposits grew by 8% to Rs 85,638 crore. Notably, deposits in RBL Bank’s current and savings accounts (CASA) witnessed a healthy 12% year-on-year increase, amounting to Rs 31,927 crore.

However, despite the overall growth in deposits, the CASA ratio experienced a slight dip of 10 basis points sequentially, reaching 37.3%. The CASA ratio is a key metric used to gauge the proportion of a bank’s deposits held in current and savings accounts relative to its total deposits.

Despite this slight decline, RBL Bank successfully maintained its asset quality. The gross non-performing assets (NPAs) as a percentage of total loans decreased to an estimated range of 3.2% to 3.3% for the June quarter, compared to 3.7% in the previous three months. Meanwhile, the net NPAs remained steady at 1.1% on a sequential basis.

On July 21, RBL Bank’s shares closed at Rs 221.70 on the stock exchange, marking a 0.93% increase from the previous day’s closing price.

R Subramaniakumar, the MD&CEO of RBL Bank, expressed satisfaction with the bank’s performance and commented on the strong operating performance across all parameters. He highlighted the healthy advances growth, particularly in the retail segment, and the bank’s success in attracting granular deposits in line with their strategic objectives. He also emphasized that revenue growth outpaced operating expenses due to cost optimization measures, contributing to strong growth in operating profits and PAT.

As RBL Bank continues its journey into FY24, the positive Q1 results set a solid foundation for the bank’s growth plans and underscore its commitment to delivering value to its stakeholders amidst a challenging economic landscape.

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