RBL BANK 2023-24 Annual Report Analysis

Tue, 16 Jul

RBL BANK has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the bank during the year 2023-24.

RBL BANK Income Statement Analysis

• Interest income during the year rose 28.1% on a year-on-year (YoY) basis.
• Interest expenses were up by 35.7% YoY during the same period.
• Operating expenses increased by 13.6% YoY during the year.
• The bank's net interest income (NII) increased by 20.9% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 5.3% in FY24 as against 5.1% in FY23.
• Other income increased by 22.1% YoY during the year.
• Net profit for the year increased by 37.0% YoY.
• Net profit margins during the year increased to 10.2% in FY24 from 9.5% in FY23.

RBL BANK Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	96,766	123,938	28.1%
Other Income	Rs m	25,069	30,600	22.1%
Interest Expense	Rs m	46,786	63,500	35.7%
Net Interest Income	Rs m	49,980	60,437	20.9%
Operating Expense	Rs m	52,618	59,765	13.6%
Pre-provision Operating Profit	Rs m	22,431	31,272	39.4%
Provisions & Contingencies	Rs m	13,235	18,673	41.1%
Profit before tax	Rs m	12,211	13,487	10.4%
Tax	Rs m	3,016	888	-70.6%
Profit after tax	Rs m	9,195	12,599	37.0%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	5.1	5.3
Net profit margin	%	9.5	10.2

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RBL BANK Balance Sheet Analysis

• The bank's deposits during FY24 stood at Rs 1,034.7 bn as compared to Rs 848.7 bn in FY23, thereby witnessing an increase of 21.9%.
• Advances for the year stood at Rs 839.9 bn as compared to Rs 701.9 bn during FY23, a rise of 19.7%.
• Cost of deposits for RBL BANK rose 9.4% and stood at 5.2%, while yield on advances rose to 11.9%.
• The lender's investments rose to Rs 294.8 bn during the year from Rs 287.3 bn in FY23.
• Borrowing stood at Rs 141.9 bn, a growth of 6.4% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 1,384.5 bn as against Rs 1,158.1 bn during FY23, thereby witnessing a rise of 19.6%.

RBL BANK Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	134,507	147,197	9.4%
Advances	Rs m	701,864	839,869	19.7%
Deposits	Rs m	848,747	1,034,704	21.9%
Yield on advances	%	10.9	11.9
Cost of Deposits	%	4.7	5.2
Investments	Rs m	287,303	294,778	2.6%
Borrowings	Rs m	133,317	141,852	6.4%
Total Assets	Rs m	1,158,057	1,384,539	19.6%

Current Valuations for RBL BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 20.8, an improvement from the EPS of Rs 15.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 246.6, stands at 10.6 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.0 times, while the price to income ratio stands at 1.1 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	161.4	204.8
Earnings per share (Unadj.)	Rs	15.3	20.8
Diluted earnings per share	Rs	15.2	20.8
Avg P/E ratio	Rs	8.6	10.6
Avg P/ABV ratio	Rs	1.0	1.0
Avg Market Cap	Rs	78,948	132,925
Dividends per share (Unadj.)	Rs	1.50	1.50

Ratio Analysis for RBL BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio deteriorated and stood at 81.2x during FY24, from 82.7x during FY23. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio increased and stood at 7.99x during FY24, from 7.30x during FY23. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): RBL BANK's capital adequacy ratio (CAR) was at 0.0% as on 31 March 2024 as compared to 16.9% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank improved and stood at 8.6% during FY24, from 6.8% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank improved and stood at 0.91% during FY24, from 0.79% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 8.43% during FY24, from 7.50% during FY23. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. RBL BANK's gross NPA ratio stood at 0.0% as of 31 March 2024 compared to 3.4% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of RBL BANK was 0.0% in financial year 2024. This compared with 1.1% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	82.7	81.2
Debt to Equity Ratio	x	7.3	8.0
Loans / Deposits	x	0.2	0.1
Capital Adequacy Ratio	%	16.9	0.0
Return on Equity	%	6.8	8.6
Return on Assets	%	0.8	0.9
Return on Capital Employed	%	7.5	8.4
% of Gross NPAs	%	3.4	0.0
% of Net NPAs	%	1.1	0.0
Yield on Advances	x	10.9	11.9
Yield on Investments	x	6.1	7.4

To see how RBL BANK has performed over the last 5 years, please visit here.

RBL BANK Share Price Performance

Over the last one year, RBL BANK share price has moved up from Rs 211.5 to Rs 246.6, registering a gain of Rs 35.1 or around 16.6%.

Meanwhile, the S&P BSE BANKEX is trading at 60,347.3 (down 0.1%). Over the last one year it has moved up from 50,559.6 to 60,347.3, registering a gain of 9,787.7 points (up 19.4%).

Overall, the S&P BSE SENSEX is up 23.6% over the year.

(To know more, you can check out historical annual results for RBL BANK here and quarterly results for RBL BANK here)