RBL Bank reported a net loss of Rs 459.47 crore for the June quarter as against a net profit of Rs 141 crore a year ago period. This was due to one-time higher provisions so as to take the provision coverage ratio to over 60%.

The bank expects to return to profitability in the next quarter and make up for the reverses in the remaining three quarters of the fiscal.

The bank said 97% of its overall gross slippages of Rs 1,342 crore came from the retail segment, which got hit because of the impact of the second Covid wave. The net slippage was at Rs 1,069 crore.

The lender’s gross non-performing assets (NPAs) deteriorated to 4.99% as of 30 June as against 4.34% in the preceding quarter and 3.45% in the year-ago period. Net NPA fell to 2.01% in the June quarter from 2.12% sequentially.

Total provisions rose to Rs 1,425 crore in Q1FY22 from Rs 500 crore a year ago, mainly due to an additional provision of Rs 365 crore to drive up its provision coverage levels and Rs 235 crore for Covide-related setbacks..

RBL Bank managing director and CEO Vishwavir Ahuja said the provisions will take care of all the requirements for the future and added that it would have been in the black if not for the Rs 600 crore of additional money set aside.

“We have taken a one-time decision to not only shore up provisioning and mitigate stakeholder concerns over our provisioning levels but also to adequately prepare the institution to come back to normalised level of business, provisioning, growth and profitability,” Ahuja added.

The bank intends to increase its provisions coverage ratio to over 65%. The PCR, without technical write-offs, has increased by 886 bps to 60.94%.

The bank’s restructured loans climbed to Rs 1,162 crore in the June quarter from Rs 933 crore in the preceding quarter.

Fresh slippages of Rs 450 crore each came from the microfinance and the credit card portfolios. Loan collections from the micro borrowers was impacted by the second wave of Covid while on the credit card front there was stress from the past, Ahuja said.

Microfinance loan collections, which had fallen to 79% at the peak of the second wave, improved to 88% as of July.

The loan book was flat on a YoY basis at Rs 56,527 crore but down 4% sequentially. Deposits were up 2% YoY to Rs 74,471 crore.