RBL Bank’s profit jumped to a higher Rs 230 crore for the quarter. It was up from the same period in last year, while the total earnings have been on a rise for the last three quarters too.
Over the last three quarters, we have seen the bank focusing on improving its asset quality as it looks to build its balance sheet and also the loan book is also stable.
The bad loans are declining and that has helped the earnings to the tune of lower provisioning. At the same time, there has been steady growth in its core lending and in certain businesses where risk is controlled. There has also been a consistent interest income, and the bank has been managing interest margins well, though not to a very high extent like other peers, but it is definitely better than it was earlier.
So that has helped in its earnings, along with an increase in the loan book but a controlled growth, and also a stable balance sheet as well as an increase in asset quality have all helped in RBL going to the earnings to Rs 230 crore and the net profit of Rs 230 crore. We have seen management being very prudent and cautious on its asset quality, not taking too many risks and looking at more control and stability rather than too much aggressive growth. After what the bank has seen in last three to five years, this is definitely a good news. And that is also getting reflected in the markets. The markets were also positive, though there could be concern on a wider macro-economic front which could be impacting banking business, given the credit demand etc. But this is a good news for the bank and I think the earnings could be better and the consistency could also be there in the coming quarters. But certainly the focus of the bank going forward will be to maintain the stability, look at the growing business, maintain the balance sheet and also look for controlled risk so that we can see a higher loan book with controlled risk for RBL in next three to five quarters or so, and I think that is a good way forward for RBL.
