of India RBL Bank considering increasing it retail The private lender’s top executive told Reuters on Tuesday that risk to avoid becoming over-exposed to large corporates and to help grow its core businesses of credit cards and microfinance as well.

To drive its focus on the retail and medium-sized corporate segments, RBL has introduced new loan products – like two-wheeler and four-wheeler loans, gold loan and education Loan —– while revamping and relaunching other products like loan against property.

“All these products will be able to give 9%-14% yield and allow to diversify the risk from corporate and microfinance book,” CEO R Subramaniakumar said in an interview.

Subramaniakumar took over as CEO in June, six months after the Reserve Bank of India appointed an additional director on the board of RBL without giving a clear reason. In the past, the central bank has placed its officials on the boards of banks to improve regulatory oversight in case of concerns.

The CEO said that apart from a new bouquet of loan products, RBL will also focus on cross-selling across its portfolio.

The bank is also working towards improving the Return on Assets (ROA) and Return on Equity (ROE). Subramaniakumar expects the ROA to be 1% by the end of this year, increase to 1.5% in the next financial year and reach around 1.7% by the end of FY2025.

However, some analysts are apprehensive about this.

Brokerage Ambit said, “Higher cost of funds as compared to larger banks and the bank’s past patchy track record has meant a foray into the low-yielding safe segment thereby achieving more than 1% ROA and more than 10% ROE.” Will remain a challenge.” Capital said in a report last month.

But Subramaniakumar was adamant when asked about the report.

“I stand by the estimate and may even surprise you.”

deposit stability

In the July-September quarter, RBL’s deposit growth was just 5 per cent, while its loan growth stood at 12.4 per cent. According to RBI data, till October 21, the industry’s deposit growth was around 10 per cent and credit growth was 17.9 per cent.

Bank is again changing its strategy away from bulk Deposit Subramaniamkumar said to increase the focus on low-cost savings and current account deposits.

“The idea is to increase the stability of deposits and reduce the volatility that comes with bulk deposits.”

The RBL stock has sunk 30% in the past one year, in contrast to the nearly 9% rise in the Nifty Bank index.

Subramaniamkumar denied any plans for share buyback, saying the bank was well capitalized and would also look at raising its tier-two capital if needed.

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