No note-ban impact: RBL net jumps 59% as advances soar 46%

Mid-sized private sector lender RBL Bank today reported a steep 59 per cent jump in its December quarter net at Rs 128.7 crore on the back of a healthy 46 per cent growth in advances despite the note ban during most part of the quarter.
It can be noted that this credit growth for the bank comes even its larger private sector peers saw a steep 11 per cent contraction in their loan growth, while the public sector peers saw much deeper contraction at 15 per cent as per Crisil data, during the quarter following the note ban, which lasted almost two-thirds of the quarter.

"We have not been impacted by the note ban at all. In fact, we had the highest credit growth during this quarter," RBL managing director and chief executive Vishwavir Ahuja told PTI in an post-earnings concall.
He said RBL has so far in the year, saw strong growth at all levels in terms of assets and deposits growth as well as profitability despite challenging credit environment.
"The demonetisation should bring in positive structural changes in the economy which bodes well for the banking and financial services industry. In fact I see stronger growth opportunities ahead," Ahuja said.
Thanks to the note ban, it saw its Casa jumps to 23 per cent from 19 per cent pre-note-ban, which in absolute terms means Rs 1,500 crore of incremental Casa deposits, while the overall deposits net grew 44 per cent to Rs 3,000 crore during the quarter. This helped RBL improve its cost-to-income ratio to 53.34 per cent for the quarter, Ahuja said.

The core net interest income of the bank, which went public in Q2 and therefore the numbers for the period are not comparable, grew 45 per cent to Rs 321.6 crore, pushed by other income which jumped 66 per cent Rs 182.26 crore, taking the total income to Rs 503.84, up 52 per cent for the period.

Ahuja said wholesale loan comprising 60 per cent of assets, grew 50 per cent while retail book, which forms the rest comprising microfiance, SME, agri loan against property clipped at 40 per cent in the reporting period,fully insulated by the cash crunch in the system due to the note ban.

In absolute terms, advances grew to Rs 26,773.12 crore, up 46 per cent year on year and 8 per cent sequentially while deposits rose 44 per cent to Rs 30,005.14 crore year on year and 7 per cent quarter on quarter.
Ahuja had given an credit guidance of 35 per cent for fiscal but in first nine months it is already at 44 per cent.
The key profitability metrix net interest margin rose to 3.38 per cent from 3.24 per cent, while cost to income improved to 53.34 per cent from 54.95 per cent.
While large banks have been reporting a massive spike in bad loans, RBL's gross NPA improved a tad to 1.06 per cent from 1.08 per cent and net NPA improved to 0.52 per cent down from 0.69 per cent a year ago.