How did you see the latest results of RBL Bank for the Dec-21 quarter?

RBL Bank had recently been in the news for all the wrong reasons. On Friday, the bank reported 2.53% growth in revenues at Rs.2,727 crore for the Dec-21 quarter. On sequential basis, revenues were higher by 3.74%. During the December 2021 quarter, RBL Bank reported lower revenues from corporate banking and treasury. However, revenues from retail banking was significantly higher on a yoy basis.

The EBIT story is a lot more interesting. Corporate banking EBIT turned around from an operating loss last year to profit in the current quarter. However, there was a 50% fall in retail banking EBIT and 90% lower treasury EBIT in the quarter. As a result, the consolidated PAT for the Dec-21 quarter was sharply lower by -26.24% at Rs.121.61 crore. This was largely on account of a 58% spike in other expenses and a small rise in employee costs.

Provisions for loan losses were lower on a yoy basis but the sharp spike in other expenses to over Rs720cr is neither explained nor highlighted adequately. That remains the X-factor in the latest quarter results. Net margins, as a result, eased sharply from 6.20% in the Dec-20 quarter to 4.46% in the Dec-21 quarter. Net margins were higher sequentially but that was more because of the huge provisions for loan losses made in the Sep-21 quarter.