RBL Bank sees an 11% drop in personal and small business deposits
In a note dated December 31, 2021, published this weekend, the ICRA rating agency put the bank’s rating under “watch with developing implications”.
ICRA said that bulk deposits (with a ticket size greater than Rs 2 crore) still represent a relatively high share of the bank’s total deposits. “As a result, the bank’s ability to roll over its deposits and demonstrate a reasonable degree of stability in its deposit base will remain essential to maintain liquidity in the short term.”
He said RBL Bank was sitting on excess liquidity, supported by the “waning” of advances over the past 18 months through September 2021. During that period, advances were 3% lower, while that deposits were higher by around 31%, resulting in statutory excess liquidity ratio of Rs 12,000 to 17,000 crore from April to September 2021. “As a result, RBL reported positive cumulative mismatches in all of its tranches. ‘Short-term maturities of less than one year, “ICRA said.
In addition, the bank’s LCR also remains above the regulatory minimum of 100%. The higher SLR and LCR indicate the bank’s ability to withstand a certain degree of stress. The bank’s deposit base, however, will be “critical to the future scale of RBL’s operations and therefore its profitability and internal capital generation”.