RBL Bank Ltd Q3 2022 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Rohan Mandora - Equirus Securities Private Limited, Research Division - Analyst : Just wanted to check in case post the event in December, are there any resignations at a middle management level or any relocation of position? Rajeev Ahuja - RBL Bank Limited - Interim MD, CEO, Head of Strategy, Retail, Transaction Banking, Financial Inclusion & Exec. Director Rohan, nothing so far. And I don't think we -- look, we have a bench which goes very deep and that bench has been around with us for years. So I don't think there's anything which we will see as any gaps emerging. Obviously, there are at least 1 or 2 areas which are industry-wide issues on technology, risk and compliance. I don't think we are unique there. But nothing which is specific to this event is impacting us and unlikely to impact us going forward, too.

Question: Rohan Mandora - Equirus Securities Private Limited, Research Division - Analyst : Sure. What was the mix of spend coming from, say, premium cards and what was the blended interchange for the quarter?

Question: Rohan Mandora - Equirus Securities Private Limited, Research Division - Analyst : Okay. Despite they being relatively premium cards, we are getting a lower interchange than some of our competitors?

Question: Rohan Mandora - Equirus Securities Private Limited, Research Division - Analyst : Sure, sir. And sir, just lastly, what was the total technology-linked OpEx as a percentage of total OpEx, ballpark -- what is your trend, in general? Rajeev Ahuja - RBL Bank Limited - Interim MD, CEO, Head of Strategy, Retail, Transaction Banking, Financial Inclusion & Exec. Director Yes. I think, Rohan, this will be 10% to 12%. I mean I'm talking all people, depreciation, AMCs all put together.

Question: Rishikesh Oza - Robo Capital - Analyst : Sir, what would be our loan book growth for next 2 years? And what would be our secured and unsecured mix going ahead then? Rajeev Ahuja - RBL Bank Limited - Interim MD, CEO, Head of Strategy, Retail, Transaction Banking, Financial Inclusion & Exec. Director Rishikesh, I think it's a little early for me to make a comment. All I will tell you, and we've given you some segment-wise status. So wholesale has grown nicely this quarter, and we see a lot of opportunity. Cards has grown well. Micro finance, obviously, we have been conservative, and now we are looking to grow. And even there, we will be very conservative until this period of Feb, March on elections is over. Small business segments, we are coming back, plus we have 2 new segments in tractors and home finance, which albeit on a small base, but they will continue growing at a faster clip. Now where does this all add up? Over a 3-year period, I'm sure we'll grow at industry plus levels, but I don't think we can sit here today and give you a very specific percentage or a range guidance. I think what I'll only say is that all our vectors, in general, are in a good shape to grow. Some are growing, some are about to grow. And if we find that the environment is conducive, risk taking is being rewarded, we will grow. And then we'll come back to you, hopefully, when we declare our full year results with a lot more clarity, just post that on what is the long-term plan on balance sheet business, areas which we will develop, areas which we will stay static in.

Question: Krishnan ASV - HDFC Securities - Analyst : So my question was to do a little bit on what -- what has been your conversation with the regulators since December. Are there any desired outcomes that the regulator has indicated. Are there certain milestones that you need to get to? Could you just give us some color qualitatively on what those (inaudible) are about? Rajeev Ahuja - RBL Bank Limited - Interim MD, CEO, Head of Strategy, Retail, Transaction Banking, Financial Inclusion & Exec. Director Krishan, nothing other than what we have been sharing with you on our own. So I don't think, as I mentioned, there's nothing which has been a directive on investing where business model, putting more branches, et cetera. I don't think there's been any conversation, and I can tell you this because I'm sitting on these meetings whatsoever. And I think the whole focus is exactly what I was telling Nilanjan. Pretty much we are tracking to what we told you 3 quarters ago when we published our March end results, what will we focus on and then continue talking to you about that. I don't think there's any change in that trajectory as far as we are concerned and as far as our board conversations are concerned.

Question: Krishnan ASV - HDFC Securities - Analyst : What will trigger you to either move less aggressive? I mean you must have certain kind of desired outcome in there as well, right? So what will it take for you to slow down on this? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 27, 2022 / 1:30PM, RATB.NS - Q3 2022 RBL Bank Ltd Earnings Call Rajeev Ahuja - RBL Bank Limited - Interim MD, CEO, Head of Strategy, Retail, Transaction Banking, Financial Inclusion & Exec. Director So let me say, I think, we -- outside the risk categorization, risk metrics, which we have tightened significantly over the last 3, 4 quarters. And that's something, again, we've shared in some level of detail in our PPTs. I think we will watch the usage patterns and the spend patterns and the ratio of transactors to EMI to revolve. I mean that has been fairly steady over the last 6 to 8 quarters. I think those things -- in fact, we do have almost a cohort-based unit economics of our card issuance for each core brand on a monthly basis, and we track what's the incremental and what -- how long does it take to start getting free cash flow and what's the payback period. Actually, Krishan, if you ignore the base of cards because that sometimes on an aggregate, if you look at annually, it does distort the ratios. But if I were to even look at normalizing for COVID, obviously, COVID did take a big bite in terms of drop in spends, drop in interest earnings as well as, obviously, provisioning. We have a fairly good handle on what is the metrics we should watch before we start dialing it down outside of risk, which is really my primary thing. And I don't have the data to do a comparison with the only card issuer, which does disclose its cost income and others. I don't think we can do a benchmark right now. But those are the things we do. Abhijit, is there anything else you want to share with...

Question: Krishnan ASV - HDFC Securities - Analyst : And is it safe to assume that this has nothing to do with any of the co-branded partners having their own demand in terms of how much you need to accelerate?