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RBL Bank Ltd.’s operating earnings declined by 30.9% YoY on account of muted net revenue growth and ~30% YoY jump in opex. Loan book growth was subdued at 6.6% YoY as the retail portfolio declined by 5% YoY on account of pause in micro-banking disbursements.
Despite the setback in Q1 FY23, the management is confident of delivering 20% YoY loan growth in FY23. Net interest margin expansion (QoQ), adjusted for one-off in Q4 FY22, is estimated to be flat-to-negative.
Going forward, NIM expansion will depend on how well the bank is able to utilize excess balance sheet liquidity and higher growth in unsecured retail portfolio (as per guidance).
RBL Bank has guided for subdued growth in operating profit in the near term as building the revenue run-rate will be a rather gradual process (on the back of retail asset growth) while growth investments will continue apace.
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