Private sector lender RBL Bank reported a standalone net loss of ₹459.47 crore for the first quarter ended June 30, 2021 as its provisions shot up by 185 per cent and drop in net interest income.
The bank had registered a standalone net profit of ₹141.22 crore in the first quarter last fiscal.
Its total income grew by 4.9 per cent to ₹2,720.5 crore for the April to June 2021 quarter compared to ₹2,592.73 crore a year ago.
Its net interest income fell by 7 per cent to ₹970 crore for the first quarter of the fiscal as against ₹ 1,041 crore a year ago. Net interest margin also dropped to 4.36 per cent as on June 30, 2021 from 4.85 per cent a year ago.
Other income, however, surged by 108 per cent year on year to ₹695 crore in the quarter under review.
However, provisions shot up to ₹1,425.67 crore in the first quarter of the fiscal against ₹500.16 crore in the corresponding period last fiscal.
Asset quality also deteriorated. Gross non-performing assets rose to ₹2,911.28 crore as on June 30, 2021 or 4.99 per cent of gross NPAs compared to 3.45 per cent as on June 30, 2020. Net NPAs also 2.01 per cent of net advances as on June 30, 2021 from 1.65 per cent a year ago. However, on a sequential basis, it was lower than 2.12 per cent as on March 31, 2021.
Transformation 2.0
“The effect of the second wave of the Covid pandemic on our asset quality was rather severe and different from the first wave given the nature of our businesses, despite the planned counter – cyclicality in our business mix. Economic activity and growth revival is now visible, hence we have decided to take a firm view and clear the decks for the future, by taking accelerated and more than adequate provisions, preparing the bank to return to normalised levels of business, provisioning, growth and profitability,” said Vishwavir Ahuja, Managing Director and CEO, RBL Bank.
The lender has also set a clear roadmap for its Transformation 2.0 journey encompassing a larger digital agenda, expansion of branch footprint, and building the secured retail assets business.