Asset quality at RBL Bank also held up with gross non-performing assets (NPAs) coming in at 1.1% of its total advances while the net NPA ratio was 0.55%. However, the RBL Bank management has stressed that costs would go up over the next six months as the lender will continue to invest. RBL Bank’s credit costs on an annualized basis rose to 89 basis points for the September quarter, from 74 basis points in the preceding three months and 57 basis points a year ago. Much of this is arising out of its non-wholesale loans that consist of agriculture loans, retail loans, and lending to micro and small enterprises. Investors would need to comb the source of credit costs and judge the ability of the lender to put a lid on them.

Source: Mint October 19, 2016 17:26 UTC