RBL Bank posted a net profit of ₹353 crore in Q4 FY24, up 30 per cent on year and 51 per cent on quarter on the back of strong loan growth and significant improvement in the bank’s asset quality.

Net advances grew 20 per cent y-o-y and 5 per cent q-o-q to ₹83,987 crore. Retail advances were up 30 per cent on year and 6 per cent on quarter to ₹49,147 crore, comprising 59 per cent of total loans.

Secured retail loans grew 43 per cent on year, housing loans by 39 per cent, rural vehicle finance grew 116 per cent, LAP by 18 per cent, and commercial banking 17 per cent.

Net Interest Income

Net Interest Income (NII) grew 18 per cent y-o-y and 3 per cent q-o-q to  ₹1,600 crore. Net interest margin (NIM) for the quarter was 5.45 per cent as against 5.52 per cent in the previous quarter and 5.62 per cent a year ago. The bank expects margins to remain flattish in Q1 FY25 and then improve through the year.

In the earnings call, MD and CEO R Subramaniakumar said that the retail business picked up pace in FY24, with the bank ending the fiscal year with monthly disbursements of over ₹800 crore in business, home and rural vehicle loans. Small ticket housing and business loans were seeing disbursements of over ₹100 crore per month.

These segments are an important area of focus for the bank as it sees opportunity to build scale through the distribution network of the bank and subsidiary RBL Finserv. Commercial banking will also be a focus area where the bank will look to build the business across lending and other fee and liability-based products, he added.

“Our focus in the short to medium term will continue to be improving profitability, maintaining and improving asset quality, and focussing on sensible growth through granular advances and deposits. At the same time, we will continue to strengthen cross sell and improve our digital platform to drive customer engagement and acquisition,” Subramaniakumar said, adding that focus will be growing secured product segments.

CASA deposits

Deposits grew 22 per cent y-o-y and 12 per cent q-o-q to ₹1.0 lakh crore. Deposits less than 2 crore grew 24 per cent y-o-y and 6 per cent q-o-q to ₹43,753 crore, accounting for 42.3 per cent of total deposits. CASA deposits grew 15 per cent y-o-y to ₹36,448 crore, with the CASA ratio at 35.2 per cent.

Subramaniakumar said that granular deposit growth will outpace overall deposit growth for the bank going ahead, also allowing the bank to improve its efficiency and profitability ratios.

Slippages from the MFI and cards portfolio continued to remain elevated but moderated sequentially to a slippage rate of about 6-7 per cent in Q4, the management said, adding that collection efficiency in the MFI portfolio has improved significantly starting December 2023. 

Gross NPA ratio improved 72 bps on year and 46 bps on quarter to 2.65 per cent as of March 2024. Net NPA ratio was also 36 bps better on year and 6 bps on quarter at 0.74 per cent.