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RBL Bank net falls 73% as bad loans weigh

RBL added Rs 1,377 crore of NPAs during the quarter, more than six times the Rs 225 crore added in the quarter ended June 2019.

ET Bureau|
Oct 23, 2019, 08.58 AM IST
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Approximately, Rs 800 crore of the above accounts have been recognised as NPA in this quarter against which the bank has taken Rs 350 crore provisions.
Mumbai: RBL Bank’s net profit slumped 73 per cent due to a sharp rise in provisions as the bank had to set aside money to cover for a rise in non-performing assets (NPAs). Standalone net profit fell to Rs 54 crore from Rs 205 crore a year earlier as provisions for stressed accounts quadrupled to Rs 533 crore from Rs 140 crore a year earlier.

CEO Vishwavir Ahuja said the bank has taken a conservative view on provisions because of the challenging economic scenario. “The companies are the same set we spoke about in the last quarter. There is also a South-based coffee group where new developments have happened in the past twothree months. As a board, we have decided to take a conservative view and erred on the side of pessimism because of which we have taken more than a 10 per cent buffer on provisions,” Ahuja said.
In a presentation on its website, the bank said that the increased stress in the economy and deterioration in the credit environment have had more than an anticipated impact on the bank resulting in higher provisions. “As a result, we expect the total stressed/NPA to be conservatively around Rs 1,800 crore. This includes the four groups (east-based group, diversified media group, south-based coffee group and west-based plastics group plus a buffer),” RBL said.
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Approximately, Rs 800 crore of the above accounts have been recognised as NPA in this quarter against which the bank has taken Rs 350 crore provisions. Loans which are due for more than 30 days but less than 60 days and classified as special mention account a (SMA1) constituted 0.45 per cent of the bank’s loan book and loans due for more than 60 days but less than 90 days (SMA 2) were at 0.39 per cent total advances as of September 30.

RBL added Rs 1,377 crore of NPAs during the quarter, more than six times the Rs 225 crore added in the quarter ended June 2019. As a result, the bank’s gross NPAs as a percentage of its loan book increased to 2.60 per cent from 1.38 per cent in June. Ahuja, however, said that the bank is confident of a recovery by the end of this fiscal year.

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