RBL Bank Q3 results: PAT drops 86% to Rs 32.63 cr amid surge in provisions

RBL Bank on Saturday reported 86 per cent year-on-year (Y-o-Y) drop in net profit to Rs 32.63 crore for the quarter ended December (Q3 FY25), on account of a surge in provisions.

 

The Net Interest Income (NII) grew nearly 3 per cent Y-o-Y to Rs 1,585 crore due to lower Joint Liability Group (JLG) funding and increased slippages causing interest reversals.

  During the same period, other income grew 38 per cent Y-o-Y to Rs 1,073 crore, out of which, the bank participated in the Initial Public Offering (IPO) of DAM Capital through an offer for sale (OFS) process and divested its entire holding, recognising a net gain of Rs 144.15 crore.

 

The net interest margin (NIM), a measure of banks’ profitability, stood at 4.90 per cent during the quarter under review compared to 5.52 per cent in the same quarter last year.

 

The provisions of the lender rose by 159 per cent to Rs 1188.90 crore in Oct-Dec period of FY25 from Rs 458.14 crore last year. Sequentially, it was up from Rs 618 crore in Q2 FY25. The bank made an additional provision of Rs 414 crore towards non-performing assets (NPAs) in the JLG segment.

 

“We continue to carry a full contingent provisioning of Rs 273 crore, which should help us in dealing with above trend slippage that we expect next quarter (Q4). We have seen a declining trend in slippages in cards, and while we expect the above trend of slippages in JLG in Q4, the yearly bucket resolution numbers for the month of December ’24 makes us believe we should start seeing normalisation in this portfolio from Q1 or Q2 FY26,” said R Subramaniakumar MD & CEO, RBL Bank during post earnings media call.

 

The net slippages in the microfinance portfolio was at Rs 531 crore and credit cards at Rs 533 crore in the quarter.

  “Part of swelling up in slippages this time is because of macro growth immediately after Covid-19 and transition impact as we were taking over the collections of BFL (Bajaj Finserv). In a quarter more, we will reach pre-transition stage collection efficiency or better. Overall macro should be settled in another two quarters,” said Bikram Yadav, business head of Credit Cards. 

 

Gross non-performing assets (NPAs) stood at 2.92 per cent at the end of the December quarter compared to 2.88 per cent at the end of the September quarter. The net NPAs was at 0.53 per cent in December quarter, while it was 0.79 per cent in September quarter.

 

The bank’s advances grew 13 per cent Y-o-Y and 2.87 per cent sequentially to Rs 90,412 crore driven by 16 per cent Y-o-Y growth in retail loans, which accounted for 60 per cent of the bank’s advances portfolio. Secured retail advances grew 38 per cent Y-o-Y.

 

Under retail loans, credit cards grew 8 per cent Y-o-Y, personal loans 5 per cent, business loans 30 per cent, and the housing loan grew 33 per cent, microfinance loans de-grew by 4 per cent.

 

Sequentially, growth in credit card, personal loans and microfinance loans dropped by 1 per cent, 5 per cent and 6 per cent respectively.

 

On the other hand, wholesale advances grew by 5 per cent Y-o-Y. Commercial Banking (mid-corporates & SME) grew at 21 per cent Y-o-Y.

 

On the other hand, the bank’s deposits grew 15 per cent Y-o-Y to Rs 1.07 trillion. Of this, current account and savings deposits (Casa) grew 12 per cent. The share of Casa deposits in the total stood at 32.8 per cent.