Tag: Vishwavir Ahuja

Mumbai: RBL Bank slumped to a loss in the quarter ended June 2021 as the bank jacked up provisions to deal with current and future stress as it prepared to clean up its balance sheet to prepare for opportunities in the next four years.

The bank reported a net loss of Rs 459 crore largely due to almost a threefold rise in provisions to Rs 1,426 crore from Rs 500 crore a year earlier on a sharp surge in slippages from the bank’s microfinance and credit card portfolios.

Total slippages at Rs 1,342 crore included about Rs 450 crore each from microfinance and credit card loans where collections were hit due to the second wave of the pandemic.

Provisions also included Rs 604 crore of extra provisions as the bank decided to increase cover for bad loans and improve the coverage ratio to 61% from 52% in March. Gross NPAs increased to 4.99% up from 3.45% a year ago.

CEO Vishwavir Ahuja said the bank has consciously decided to bite the bullet as it wants to double down on the opportunities in the near future.

“We have pressed the reset button. As economic activity and growth revives, vaccinations gather pace and health infrastructure improves we wanted to have a clean slate to launch a 2.0 transformation based on vectors like branch banking, credit cards and micro banking which we are already ahead,” Ahuja said.

RBL expects the market to resume normal operations by the third quarter. It has set itself a target of increasing its customers base threefold from the current 4 million in the next four years.

Ahuja said the immediate target is to increase its return on assets to 1% by the end of March 2022 from negative 1.8% at the end of June.

“Our retail loan growth will be more in line with the GDP growth at 7% to 10%. Our corporate book is solid after the cleanups in the last couple of years so corporate growth will also be led by high-quality clients. There has been a significant opening up in the markets, especially in the urban areas as shown by the high-frequency data. But of course, it all depends on the Covid third wave,” Ahuja said.

A strong increase in other income helped revenue to double to Rs 695 crore led by a 137% growth in retail fee income.

The growth in other income masked a 7% fall in net interest income year on year to Rs 970 crore.

The bank has appointed four new directors —Vimal Bhandari as a non-independent director and Somnath Ghosh, Chandan Sinha and Manjeev Singh Puri as independent directors subject to shareholder approval.