RBL Bank to continue to focus on retail, branch banking businesses

Private sector lender RBL Bank remains optimistic about its retail and branch business, and is keeping a close watch on the impact of the national lockdown and efforts to prevent the further spread of novel coronavirus.

“We are very clear that retail will continue to be a focus. Obviously, the next three monthswe won’t be able to invest much because of what’s happening. We have to be mindful of the impact of the pandemic. We are very clear our branch banking will expand,” said Rajeev Ahuja, Executive Director, RBL Bank.

Housing loans

The bank will also continue to build on its business and housing loan portfolios as the situation normalises, though it has cut back on card issuances.

“Our business loans will also continue – those are modest ticket size. We will also continue building our housing business in both semi-urban and urban. That also we will continue building. Those are the opportunities thatwill continue in my view, and those are sectors where we have some strength,” Ahuja told BusinessLine , adding that in the medium to long term, the bank remains committed to expanding the entire retail business – branch footprint, rural and urban consumption, and housing.

The private sector lender has been facing concerns from investors amiddeteriorating asset quality and withdrawals after the YES Bank crisis.

To assuage investor concerns, the lender had, on April 1,issued a lengthy statement on its financial position and had stressed that it has strong operating profit trajectory for the quarter.

Ahuja was, however, optimistic, but cautioned that there could be challenges for the industry if the lockdown gets extended by a longer period.

“The next three months will be the same for almost all people. Recovery will be technology-based,” he said, adding that credit appetite has been almost next to nothing.

In its statement, the bank had said the asset quality position in legacy book was consistent with guidance given in the third quarter with no material change. “There was 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,” it had said.

“Our credit advances for March quarter is almost the same as that in September, and I won’t be surprised if it is the same for the next two to three months,” he said.

Bank deposits

He also stressed that the bank’s deposits, barring those from the government, has had good growth in March. “Our retail deposits are fairly stable, and we have covered a lot of ground in the last two to three weeks despite Covid-19-related issues. Government deposits were a small but important part of the franchise,” he said, adding that the bank expects it to come back eventually.

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