RBL Bk MD sees recovery in growth, improvement in asset quality from Oct-Mar
This story was originally published at 15:31 IST on 19 July 2025
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--RBL Bank MD: Margins at end of FY26 likely to be close to FY25-end level
--RBL Bk:Dominant contribution to slippage from microfin loans, but expected
--RBL Bank MD: Expect to see reasonable improvement in NIMs in Oct-Dec
--CONTEXT: RBL Bank MD Subramaniakumar briefs media after Apr-Jun earnings
--RBL Bank MD: Expect growth recovery, asset quality improvement from Oct-Mar
NEW DELHI – RBL Bank Ltd., whose slippages have been weighing on profits for almost a year, is likely to see a recovery in growth and improvement in asset quality in the latter half of the current financial year, Chief Executive Officer and Managing Director R. Subramaniakumar said Saturday in a press conference after the bank released its financial results for the quarter ended June.
"We have been consciously growing our portfolio a little slow... we have continued to put high threshold for origination of new (credit) cards, both from asset quality stand-point, as well as from prospect stand-point, to ensure that it becomes a meaningful customer acquisition too for the bank," Subramaniakumar said. "As a result, we should start seeing growth coming back in H2 (Oct-Mar) as well as asset quality improvement."
RBL Bank's net profit fell 46% on year in the June quarter to INR 2.00 billion as net slippages rose to INR 9.18 billion from INR 7.30 billion in the preceding quarter. The bank's net slippage ratio increased sharply to 0.99% in the reporting quarter from 0.81% in Jan-Mar and 0.63% a year ago.
In the June quarter as well, microfinance loans and credit cards were the dominant contributors to slippages, but the bank had already anticipated this trend, the MD said. The bank reported slippage of INR 3.2 billion from microfinance loans and credit cards in Apr-Jun, Subramaniakumar added. RBL Bank's net slippage was INR 9.18 billion in the reporting quarter.
RBL Bank's net interest margin also dropped to 4.50% in Apr-Jun from 4.89% in the quarter ended March. The lender had reported a net interest margin of 5.67% in Apr-Jun 2024. But the bank is likely to end the current financial year with a NIM close to what it had at the end of the last financial year, which was 4.89%, according to Subramaniakumar.
"Repo-linked loans, predominantly mortgages and parts of wholesale loans, reprice immediately as repo rate is cut, whereas the deposit cuts, which we have executed, comes over a period of time," Subramaniakumar said, while explaining the reason for the fall in its net interest margin in Apr-Jun. "While we may see some small improvement (in margins) in Q2 (Jul-Sept), we will start seeing reasonable improvement starting Q3 (Oct-Dec) onward."
On Friday, shares of RBL Bank had ended 1.95% lower at INR 263.14 on the National Stock Exchange. End
Reported by Krity Ambey and Pallavi Singhal
Edited by Tanima Banerjee
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