RBL Banks reports a whopping 7 times profit growth in Q2FY23

RBL Bank, a Midcap private sector lender reported a standalone profit of INR 201.55 crore for the September quarter of FY23, growing 6.5 times from the year-ago period on a low base. The profit in Q2FY22 was hit by higher provisions for bad loans, while the growth was almost flat sequentially.

The lender’s net interest income (NII) grew 16 percent year-on-year to Rs 1,064 crore during the July-September, with net interest margin rising 49 bps YoY to 4.55 percent, the bank told exchanges. The sequential growth in net interest income was 3.6 percent and NIM expanded 19 bps.

The bank reported 12 percent year-on-year credit growth at INR 62,942 crore during the quarter, while deposits increased by 5 percent to INR 79,404 crore. There was a considerable decline in provisions and contingencies at INR 241 crore, a YoY drop of 26 percent and 3 percent on a sequential basis.

The pre-provision operating profit also dropped in double-digit – by 26 percent year-on-year to INR 512 crore for the quarter, and the sequential fall was 3 percent. On the asset quality front, gross non-performing assets as a percentage of gross advances improved to 3.80 percent for the September FY23 quarter, down 28 bps sequentially, but there was a 10 bps QoQ increase in net NPA at 1.26 percent, the bank said.

The provision coverage ratio including technical write-offs dropped to 84.3 percent as of September FY23, down from 85.3 percent in the previous quarter, but improved from 76.6 percent YoY. In the first half of FY23, RBL Bank recorded a standalone profit of INR 403 crore against a loss of INR 429 crore in the same period last year, with a significant fall (76 percent YoY) in provisions and contingencies at INR 494 crore.