Exposures to stressed corporates continued to haunt small-sized private sector lender RBL Bank which reported a massive 69 per cent dip in its December quarter net profit at Rs 69.9 crore on Wednesday.
The bank, which had disclosed a Rs 1,800 crore exposure to a set of stressed corporates earlier, said Rs 710 crore out of that slipped into non performing assets, forcing it to increase provisions.
The overall provisions shot up to Rs 630 crore from Rs 160 crore in the year-ago period and the bank's managing director and chief executive Vishwavir Ahuja told PTI that it has set aside more money than regulatory mandated.
Another Rs 290 crore of the stressed pool is yet to be recognised, Ahuja said, adding there is no hope to avoid the slippage which will be done in the fourth quarter.
However, total income increased to Rs 2,644.30 crore as against Rs 1,029.20 crore for the same period year ago.
Asset quality of the bank deteriorated with gross non-performing assets (NPAs) rising to 3.33 per cent of gross advances as on December 31, 2019 from 1.38 per cent in the year-ago period.
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Net NPAs also rose to 2.07 per cent of net loans from 0.72 per cent in the corresponding quarter of 2018-19, the bank said.
Ahuja said that there is no change in the management commentary since it came out with the disclosure the first time, and stressed that apart from these reverses, the bank's other verticals are working normally.
Its net interest income increased 41 per cent to Rs 922.6 crore on a margin expansion to 4.57 per cent and despite a nearly halving of the credit growth from the trend to 20 per cent. Ahuja said it will close the fiscal with a loan growth in "mid-20s" per cent.
Retail credit grew 42 per cent and now occupied 51 per cent of the book, while corporate grew only 3 per cent as the bank gets cautious. The bank, which raised Rs 2,700 crore of capital last month, closed the quarter with a total capital adequacy of 15.66 per cent.
The bank scrip closed 0.67 per cent down at Rs 339.10 a piece on the BSE, as against a 0.50 per cent correction on the benchmark index Sensex.