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Ahead of its fourth quarter results, private sector lender RBL Bank, on Wednesday, said that it has strong operating profit trajectory for the quarter and that its net interest margin is at an all-time high.

Going ahead, it will focus on balancesheet protection and said that Covid-19 continues to be a concern. It has come outwith a detailed statement to dispel concerns about the bank’s financial health, which has also put its scrip under pressure.

With the coronavirus pandemic and national lockdown leading to shut down of most business activities, RBL Bank said it is already undertaking a detailed review of portfolio being undertaken to assess potential impact.

“Exposure to sectors such as aviation, hospitality, transport and logistics and organised retail is low,” it said, adding that it is also closely monitoring exposure as the system is very fluid.

On the credit card business, post the lockdown, the bank has stopped acquisitions and only digitally sourced cards are being booked.

“Spends are down to 40 per cent of the run rate on credit cards during the lockdown period,” said RBL Bank, adding that it expects a slight increase in credit costs in March and April as collection is not possible during this period.

RBL Bank said its business loan portfolio continues to be resilient as of now. On its asset quality, it said that the position in legacy book is consistent with the guidance given in the third quarter and there is no material change. “There is some increase in slippage in SME (wholesale) and retail, largely on account of stress and inability to collect in the last few days because of the lockdown. However, overall, we expect lower slippages quarter on quarter,” it said.

The lender said it is well capitalised with total capital adequacy ratios of about 16 per cent and Tier I CAR of about 15 per cent.

Liquidity coverage ratio was healthy at about 127 per cent average for March. “There were some run-offs of deposits in this quarter (under eight per cent) since the last quarter. However, reduction essentially in bulk deposits from government entities and corporations,” RBL Bank said.

On Wednesday, the lender’s scrip closed at a loss of 3.17 per cent at ₹131.35 apiece on the BSE.

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