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Muted quarter with deposits and advances being flat QoQ

Wholesale advances grew sequentially, while retail portfolio declined

RBL Bank (RBK) has released its quarterly update underscoring its 1QFY23 business numbers. Here are the key highlights:

* RBK reported a 6.5% YoY increase in gross advances to INR621b. However, advances were flat QoQ. While wholesale advances grew 4% QoQ, retail advances declined 3% sequentially. As a result, the mix of retail-to-wholesale moderated partially to 51:49 (v/s 52:48 in 4QFY22).

* The deposit base increased 6.4% YoY to INR792b (flat QoQ). CASA reported healthy growth of 13.8% YoY (2.3% QoQ); TD rose marginally at 2.6% YoY (down 0.9% QoQ). Thus, the CASA ratio improved 70bp QoQ to 36.0%. Overall, retail deposits (as per LCR) grew 2% QoQ, ahead of total deposits. Management plans to continue with its strategy of improving the share of retail deposits in the total liabilities.

* Asset quality metrics continue to see improvement in 1QFY23, in line with the improving trend witnessed in the last few quarters.

* LCR for the bank stood at 149% (v/s 138% in 4QFY22).

* Valuation and view: In 1QFY23, RBL Bank posted sequentially flat loans and deposits. Wholesale book grew while retail book declined. Deposit franchise is improving steadily led by moderate growth in retail deposits.

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