Quarterly Results - RBL Bank and PNB Bank

Punjab National Bank reported a -7.73% fall in total revenues for the Jun-21 quarter at Rs.22,815 crore. Net profits were up 117% yoy at Rs.1,168 crore. Interest and investment income were lower in the quarter. Overall, while the revenues from corporate banking were higher, revenues from the treasury were lower while retail banking was sharply lower. 

_{Data Source: BSE Filings}

Gross NPAs at 14.33%, was flat but it is still an uncomfortable number in absolute terms. Capital adequacy is comfortable at above 15% but expanding the loan book will require additional capital buffers. PAT margins at 5.12%  in the Jun-21 quarter were higher than 2.17% in the Jun-20 quarter and 3.08% in the sequential quarter.

RBL Bank Ltd reported a 4.68% rise in total revenues in the Jun-21 quarter at Rs.2,805 crore. The company reported a net loss of Rs-462 crore in the quarter due to a 3-fold surge in provisioning for loan losses and contingencies. In the Jun-20 quarter, the company had reported a net profit of Rs.154 crore. The fall in interest income due to lower loan yields were offset by a sharp spike in other income. While revenues from retail banking were sharply higher, the PBT from retail banking was in the negative due to provisioning for asset stress.
 

The provisions for loan losses and contingencies spiked to Rs.1,426 crore due to asset quality stress resulting in the bank dipping into losses. Operating margins were 28.69% in the Jun-21 quarter. Gross NPAs at 4.99%, were higher by 65 bps on a YoY basis. Capital adequacy is comfortable at above 17%. However, the retail stress appears to have increased sharply and it remains to be seen how much of this stress translates into actual loan losses.