*RBL Bank Expects Lower Slippages In Q4, To Focus On Consolidation*
RBL Bank Ltd. expects lower slippages sequentially in the quarter ended March despite the stress following a national lockdown and inability to make collections from its small business and retail customer segments.
The private lender said in its quarterly update that it will focus on consolidating its balance sheet in the future. The novel coronavirus outbreak, it said, remains a concern and is an evolving situation.
A run-off in deposits, RBL Bank said, in the three-month period was under 8 percent over the previous quarter. It attributed the reduction to flight of bulk deposits from government entities and corporations. Liquidity coverage ratio for March stood at approximately 127 percent, it said, adding the marginal standing facility wasn’t utilised.
The bank also said its net interest margin rose to a record, with its retail to wholesale advance mix ratio was around 55:45.
*Highlights Of RBL Bank’s Q4 Update
Branch Expansion
Total branch count rose by 62 to 386 in FY20. Fell short of the targeted 400 branches on the back of the national lockdown.
Expansion plans for FY21 may continue as planned.
Added marquee clients in corporate cash management and digital payments spaces.
*Wholesale Book*
Conducting detailed review of portfolio to assess potential impact.
Concentration risk lower after recent de-bulking exercise.
Exposure to sectors such as aviation, hospitality, transport/logistics, organised retail is low.
*Credit Cards*
Acquisition stopped after lockdown, only digitally sourced cards being booked. Volume to return to normal in a couple of months after lockdown. Spends down to 40 percent of run rate during lockdown period.
*Business Loans*
Portfolio is resilient as of now, with: a) More than 95 percent of portfolio with self-occupied collateral. b) Comfortable loan-to-value ratio around 65 percent. c) Negligible exposure to stressed sector like tours and travel, entertainment (less than 5%).