11,678.50-119.4
Stock Analysis, IPO, Mutual Funds, Bonds & More

We intend to clean up the stressed pool by end of FY20: Vishwavir Ahuja, RBL Bank

We had last time identified a pool of stressed assets and we have stayed exactly according to script.

, ET Bureau|
Last Updated: Jan 23, 2020, 07.53 AM IST
0Comments
ETMarkets.com
Vishwavir Ahuja-RBL-1200
In an interview with Joel Rebello after the results for the third quarter, RBL Bank CEO Vishwavir Ahuja said the heightened provisions are in line with the guidance and he expects the cleanup to finish by the end of this fiscal. He also spoke about the bank’s growth prospects. Edited excerpts:

What is the reason for this jump in provisions?
We had last time identified a pool of stressed assets and we have stayed exactly according to script. We said we will take the bulk of the provisions in the previous and this quarter and the remaining tail will come in the fourth quarter, so it’s according to plan. Of the Rs 1,800 crore identified number, we took Rs 800 crore last time and Rs 700 crore this time. The balance may have to be taken in the last quarter so there is no change from an NPA perspective as far as that stressed pool of assets is concerned. These are same — a Gujarat name, the Eastern India name and a conglomerate.

How long will this pain continue?
If I take out this watch list, I also run a Rs 70,000-crore franchise and on that the total net slippage was Rs 300 crore — a small number. We have not added new large names to that stressed list. We had only added a very small number outside that list. Our businesses otherwise are doing fundamentally well, they are growing and they are accruing value to the bank. We intend to complete this clean-up exercise with the identified stressed asset pool and generally accounting for all of that within this fiscal year so that we can be on a clean slate on a BAU (business as usual) basis next year. In no way has our outlook changed.

How was business growth this quarter?
Corporate growth was only 3%. As we have said, until we grapple with the challenges of the environment and are confident on the fundamental backdrop of the economy and the opportunities in the corporate space and manage the short term issues, we will be cautious on the growth side.

Last quarter we had said we won’t be surprised with a flat to negative growth from the corporate side. We have grown more than 3%. Non-wholesale side has grown 42% year-on-year and that’s the main point that all other aspects of the franchise — deposits, CASA, income has grown.

Our operating profit is up 47% and that’s the going forward number because it reflects the fundamental trend. Once we are back to normal trajectory of asset quality and provisioning, a quarter from now, then you will see the real strength of the franchise which is growing at 25% per annum.

Also Read

There are signs of slowdown but total business rejig not needed: Vishwavir Ahuja, RBL Bank

RBL’s Q2 weakness a hiccup... we’ll recover by FY20 close: Vishwavir Ahuja

RBL Bank’s effective tax rate this quarter is almost 48% because of DTA effect: Vishwavir Ahuja

Today’s fall completely unexpected, we continue to grow and make profit: Vishwavir Ahuja, RBL Bank

Comments
Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links


Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service