RBL Q1 net profit up 43% to Rs 288 cr; aims to reduce unsecured loans share

Private sector lender RBL Bank on Saturday reported a 43 per cent jump in net profit for the June quarter at Rs 288 crore, buoyed by growth in core income.

The city-based lender reported a 21 per cent jump in basic net interest income at Rs. 1,246 crore on the back of 21 per cent growth in advances and a 0.48 per cent expansion in net interest margin (NIM) to 4.84 per cent.

Other income grew by 12 per cent to Rs 685 crore.

Managing Director and CEO R Subramaniakumar said the bank aims to increase NIMs to 5 per cent going forward on the back of a better product mix.

Retail loans grew 34 percent, with newer products such as mortgages seeing the most growth.

The share of unsecured assets is currently at 43 percent, Subramaniakumar said, and the bank aims to reduce this percentage by two percentage points by the end of the financial year, as the share of secured retail financing, including mortgages, two-wheelers and auto loans, grows.

At the same time, he continues to focus on the credit card segment, which has been identified as a niche sector, Subramaniakumar said, adding that book will grow by up to 25 percent in FY24.

He said the cost-to-income ratio has fallen to 66.5 percent, but there is a possibility that it will rise in the next two quarters due to annual wage increases.

On the expense front, the lender has had some successes with technology costs and a higher number of loans that its subsidiaries took out as sales agents earlier, he said.

The bank’s overall capital adequacy was 16.7 percent, with the underlying Tier-1 at 15.1 percent.

The branch is set to open around 70-75 branches in this fiscal year.

Subramaniakumar said RBL has also come “fairly” when it comes to its governance standards over the past year.