RBL Bank Limited Q4'21 & FY'21 Earnings Conference Call | Yadnya Investment Academy

Management:

Vishwavir Ahuja: managing director & chief executive officer

Rajeev Ahuja: executive director

Jaideep Iyer: head – strategy

R. Gurumurthy: head – risk & governance

Harjeet Toor: head – retail, inclusion & rural business

Surinder Chawla: head – branch & business banking

Brijesh Mehra: head - corporate, institutional & transaction banking

Q4 Highlights:  

• YoY Revenue growth of 5% powered by Other Income growth of 38%.
• Sequential improvement in operating profit throughout the year –Q1 FY21- 690 crores; Q2 FY21 – Rs. 720 crores; Q3 FY21-Rs. 805 crores and Q4 FY21 Rs. 877 crores
• Net Profit at Rs. 508 crores for FY21 and PAT for the quarter was 75 crores, similar to FY20, down QoQ due to accelerated/additional prudential provisioning.
• Despite COVID impact, consistent growth in PPOP every quarter leading to PPOP growth of 17% YoY (9% growth sequentially) to Rs. 877 crores.
• NIM at 4.2%, sequentially flat, but subdued for the year due to reversal of interest income on slippages.
• Retail advances grew 13% YoY and 4% QoQ
• Strong Deposit growth 26% YOY (9% sequentially) to Rs. 73,121 crores; LCR at 154% for the quarter
• Reduction in NPA levels; GNPA at 4.34% vs. 4.57% in Q3FY21 (Proforma basis), NNPA at 2.12% vs. 2.52% in Q3FY21 (Proforma basis). NNPA flattish YoY despite COVID related slippages in FY21
• PCR increased to 72.2% in Q4FY21 (up 800bps YoY)
• Total customer base of 9.63 million; addition of 0.55 million in the quarter.
• Distribution network of 429 branches, 412 ATMs and 1365 BC branches (26 branches added in the quarter)
• CRAR at 17.5%; CET 1 to 16.6%; LCR at 154% for the quarter.

FY21 Highlights:

• Net interest Income grew by 4% in FY 21from Rs. 3,630 cr to Rs. 3,788 cr.
• Core Fee Income grew by 1% in FY 21 to Rs. 1,757 cr.
• Net Total Income grew by 6% in FY 21 from Rs 5540 cr to Rs. 5,845 cr.
• Operating Profit grew by 14% in FY 21 from Rs 2714 cr to Rs. 3,091 cr.
• Operating expense decreased from Rs 2,826 cr in FY20 to Rs 2,755 cr in FY21.
• Advances grew by 1% YoY and 4% QoQ to Rs. 58,623 cr.
• Net profit grew from Rs 506 cr in FY20 to Rs 508 cr in FY21.
• Net interest margin decreased from 4.6% in FY20 to 4.5% in FY21.

Balance sheet Highlights:

• Wholesale advances in GNPA and net NPA was Rs.1,100 crores and Rs.545 crores respectively.
• Gross and net NPA position as of March '21 were at 4.34% and 2.12%, as against pro forma numbers of 4.57% and 2.52% as of December 2020.
• Maintained the net NPA ratio as on March '21 at 2.1%.
• PCR including technical write-offs improved to 72.2% from 64% in March '20 and excluding write-offs, it has improved to 52.3% from 44% in March '20, representing an increase in PCR by approximately 800 basis points.
• CRAR as of March’21 is 17.5%.

Deposits:

• Total Deposits grew 26% YoY and 9% QoQ to Rs. 73,121 crores
• Strong CASA growth at 36% YOY (11% sequentially) to Rs 23,264 crore
• CASA ratio grew QoQ even on higher deposit base, Ratio at 31.8% vs. 29.6% in Q4FY20
• The proportion of retail deposits as per the LCR definition in the bank deposit has grown from 32.9% as of March 2020 to 37.2% as of March 2021 on a growing deposit base.
• SA Deposits grew 41% YoY.
• Retail Deposits (as per LCR definition) grew 12% QoQ.
• Cost of deposit in Q4 FY21 was at 5.5%.

Advances:

• Total Advances grew by 1% YoY from Rs 58,019 cr to Rs. 58,623 cr.
• Retail Advances grew by 13% YoY from Rs 30,562 cr to Rs. 34,390 cr.
• Wholesale Advances reduced by 12% YoY from Rs 27,457 cr to Rs. 24,233 cr.
• The ratio of Retail: Wholesale mix is at 59:41
• Credit card advances increased by 16% YoY from Rs 10,509 cr. to Rs 12,177 cr.
• The advances in the housing loans were at 1,669 crores in Q4 FY'21.

Credit cards:

• RBL has issued 3.82 lakh new cards in Q4 versus 3.5 lakhs in the previous quarter. Overall, in the year the new card issuance was at 9.8 lakhs versus 14.5 lakhs in FY'20.
• Market share in terms of cards in force was at 4.7%, up 10 basis points YoY.
• Spends continue to be strong and were at Rs.9,170 crores in Q4, up 6% QoQ and 10% YoY.
• For the full year, spends were at Rs.29,500 crores slightly higher than FY'20. Per card spends and active rates further improved over Q3 FY'21.
• RBL has a restructured book of only around Rs.274 crores which is 2.2% of its cards book as at March end.
• Credit cost was at 10.4% for the full year versus 7.6% for the nine months FY'21
• Credit costs will remain elevated for another quarter or maybe two depending on the impact of the currently raging pandemic and then we will see it coming down to normal levels over the rest of the year.

Micro Banking: 

• The micro banking book saw a growth of 6% over the previous quarter and 11% YoY.
• The collection efficiency improved further and was around 97% on an average for Q4 FY'21.
• The new portfolio which is around half of the total book continues to perform at over 99.5% collection efficiency levels.
• GNPA for the quarter was 3.67% versus 2.7% in the previous quarter.
• RBL currently has 3.33 Mn active loan accounts.
• Advances grew by 12% YoY from Rs 6,469 cr to Rs. 7,265 cr.
• Loan disbursement has continuously grown; It has seen a growth of 5.5% QoQ from Rs 2132 cr to Rs 2250 cr and 47% growth from Rs 1530 cr to Rs 2250 cr.
• As compared to the industry, the 90-plus DPD numbers for the RBL Bank portfolio are at 50% levels of the industry as of Feb as per data from the credit bureau.

Digital Banking:

• The bank nearly 4 million customer relationships in metro urban India to a branch banking and card franchises, of which 60% interact with us via digital channels
• Balances of digital accounts have grown 4 times over the last four quarters; 40% to 45% of the bank’s monthly sourcing on savings account is now through digital.
• RBL is at 5^th position in the industry in terms of processed transaction; Total Transaction Volume recorded was around Rs 23.20 cr.