GuruFocus - Release Date: January 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- RBL Bank Ltd (NS:RATB) (BOM:540065) reported a 13% year-on-year growth in advances, with retail advances growing by 19% and secured retail advances by 38%.
- The bank's total deposits grew by 15% year-on-year, with granular deposits increasing by 20% year-on-year.
- The bank's CASA ratio improved to 32.8%, with average CASA balances growing 14% year-on-year.
- RBL Bank Ltd (BOM:540065) has taken proactive steps to address asset quality challenges, including increased provisioning and risk mitigation measures.
- The bank's net interest income increased by 3% year-on-year, and total other income rose by 38% year-on-year, driven by a one-time gain and improved fee income.
- RBL Bank Ltd (BOM:540065) faced challenges in asset quality, particularly in the unsecured segments, leading to elevated slippages.
- The bank's net interest margin declined sequentially to 4.9%, impacted by interest reversals and lower disbursements.
- There is a competitive environment for deposits, which may impact the bank's ability to grow its deposit base.
- The bank's cost of deposits and cost of funds increased sequentially, which could pressure margins further.
- RBL Bank Ltd (BOM:540065) anticipates continued elevated slippages in the unsecured segments in the near term, which may require additional provisioning.
A: It is the current book which is due in that particular month. Out of ?100, we collected 98.4, which was 97.4 the previous month. January makes us believe the trend is continuing the same way. - Unidentified_2
Q: Given the current collection efficiency, what gives you confidence that slippages will start trending down?
A: We are confident that the current bucket efficiency will reach 99.1% by March. The trend from December onwards will show lesser slippages from March onwards. We still have a contingent provision of ?273 crores to manage any impact. - Unidentified_2
Q: With the implementation of tighter guardrails from April 1st, could collection efficiency potentially decline further?
A: The number of institutions from which borrowers can take loans has been adapted by us. We believe the quality of the portfolio will improve, and the existing portfolio will not be impacted. - Unidentified_2
Q: What is the current capital level's sustainability given the growth ambitions, and when might the next capital raise occur?
A: We don't expect a capital raise in the foreseeable future. The burn is expected to be about 10 basis points a quarter, and we are comfortable with up to 13% CET1, giving us a year and a half of runway. - Unidentified_3
Q: Can you provide the segment-wise gross and net slippage details for wholesale, cards, and MFI?
A: For cards, the gross slippage was ?567 crores and net slippage was ?533 crores. For the JLG book, gross slippage was ?536 crores and net slippage was ?521 crores. - Unidentified_3
For the complete transcript of the earnings call, please refer to the full earnings call transcript.