More Stories

Informist, Friday, Apr. 25, 2025

MUMBAI – RBL Bank aims to moderate its growth in the unsecured loan portfolio and focus on quality over quantity of loans, Managing Director and Chief Executive Officer R. Subramaniakumar said in a post-earnings media call. "We were very clear that over a three-, five-year period, our unsecured portions will keep coming down. We've had pain in terms of absorbing the stress. Fortunately, our profits and reserves from our other activities and businesses have provided and we go into FY26 (2025-26) with a tighter filter," he said. "We will choose quality over quantity and we do expect that unsecured will continue being important but not being the same level it was say three years ago."

Slippages of the bank, especially the ones arising out of the microfinance portfolio, are expected to normalise going forward as the bank has provided 100% provision coverage for the same, the management said. "During the quarter ended Mar. 31, the bank, on prudent basis, made additional provision on gross NPAs (non-performing assets) of Joint Liability Group portfolio, taking total NPA provision on this portfolio to 100%," according to the notes to accounts of the bank.

The bank has been struggling with slippages in its microfinance portfolio for at least last two quarters. In the March quarter, net profit of the bank fell 81% on year to INR 687 million as provisions rose 90% on year to INR 7.85 billion. "In a nutshell, we don't expect to take extraordinary decisions on MFI going forward, as we see the industry right now," the management said.

Management of the bank expects "business as usual" when it comes to slippages going forward, across segments. Credit card slippages in the March quarter were at INR 4.79 billion, down from INR 5.33 billion a quarter ago and slippages from the microfinance portfolio were INR 4.39 billion compared to INR 5.21 billion in the Oct-Dec quarter, the management said.

The bank also expects a moderation in its net interest margin going forward because of expected repo rate cuts by the Reserve Bank of India's monetary policy committee. "We will potentially see further rate cuts by RBI and typically given that this is the first time the banking industry is on externally benchmarked rates...we expect that margins will come down and then stabilise back to roughly current levels over the next three to four quarters," the management said.

In terms of business growth, the bank aims to grow in "mid-teens" in the current financial year, the management said. The advances of the bank were up 10% on year at INR 926.18 billion as of Mar. 31. The bank is in no hurry to raise funds and has sufficient capital to fund growth for the current financial year, the management said. On Friday, shares of RBL Bank closed at INR 188.09 on the National Stock Exchange, down 5.2% from the previous day.  End

Reported by Kabir Sharma and Sachi Pandey

Edited by Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.