Earnings Review
Meandering out of microfin stress, RBL Bk Q1 PAT falls 46%
This story was originally published at 16:28 IST on 19 July 2025
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--RBL Bank Apr-Jun net profit INR 2.00 bln
--Analysts saw RBL Bank Apr-Jun net profit at INR 1.70 bln
--RBL Bank Apr-Jun net profit INR 2.00 bln vs INR 3.72 bln year ago
--RBL Bank Apr-Jun total income INR 45.11 bln vs INR 43.02 bln year ago
--RBL Bank Apr-Jun provisions INR 4.42 bln vs INR 3.66 bln year ago
--RBL Bank gross NPA ratio 2.78% as on Jun 30 vs 2.60% quarter ago
--RBL Bank net NPA ratio 0.45% as on Jun 30 vs 0.29% quarter ago
--RBL Bank Basel III capital adequacy ratio 15.42% as on Jun 30
--RBL Bank Apr-Jun net interest income INR 14.81 bln vs INR 17.00 bln year ago
--RBL Bank Apr-Jun NIM 4.50% vs 4.89% qtr ago, 5.67% year ago
--RBL Bank provision coverage ratio at 94.2% as on Jun 30
--RBL Bank deposits INR 1.127 tln as on Jun 30, up 11% on year
--RBL Bank net advances INR 944.31 bln as on Jun 30, up 9% on year
--RBL Bank: CASA ratio at 32.5% as on Jun 30
--RBL Bank Apr-Jun avg liquidity coverage ratio at 152%
--RBL Bank Apr-Jun credit cost 0.50% vs 0.93% qtr ago, 0.59% year ago
--RBL Bank retail advances INR 566.25 bln as on Jun 30, up 5% on year
--RBL Bank wholesale advances INR 378.07 bln as on Jun 30, up 15% on year
--RBL Bank: Apr-Jun cost of deposit 6.53%, flat vs qtr ago, year ago
--RBL Bank: Apr-Jun recoveries at INR 890 mln vs INR 2.35 bln qtr ago
--RBL Bank: Apr-Jun net slippage ratio 0.99% vs 0.63% year ago
By Kabir Sharma
MUMBAI – RBL Bank Ltd. Saturday reported a sharp 46% on-year fall in its net profit for the June quarter. The decline in profitability comes at a time when the bank is struggling to navigate its way out of the stress in its microfinance portfolio. Additionally, a sharp rise in net slippages leading to a surge in the slippage ratio hints that the bank has not yet recovered from its asset quality woes.
The private sector lender managed to beat Street estimates by a small margin and reported a net profit of INR 2.00 billion against the expectation of INR 1.70 billion. In the corresponding period last year, the bank had reported a net profit of INR 3.72 billion. Sequentially, the bank saw a 192% surge in bottom line as "...slippages in the JLG (joint liability group) portfolio have moderated," according to R. Subramaniakumar, managing director and chief executive officer of RBL Bank.
Net slippages of the bank rose to INR 9.18 billion in the reporting quarter from INR 7.30 billion in the previous quarter. The slippage ratio of the bank increased sharply to 0.99% in Apr-Jun from 0.81% a quarter ago and 0.63% a year ago.
The bank has been struggling with slippages in its microfinance portfolio for at least three quarters. As a consequence, RBL Bank's gross non-performing assets ratio continued to trend higher at 2.78% as of Jun. 30, compared to 2.60% a quarter ago. Its net non-performing assets ratio was also higher at 0.45% as of Jun. 30 against 0.29% a quarter ago, reflecting the problems with its asset quality.
Provisions of the lender also rose 21% on year to INR 4.42 billion in the quarter ended June. Sequentially, the provisions were down 44%, which helped the bank report a quarter-on-quarter increase in its net profit. The bank has created a contingent provision of 1% on joint liability group advances of INR 540 million. The provision coverage ratio of the bank was at 84.03% as of Jun. 30. Credit cost of the bank improved, falling to 0.50% from 0.93% a quarter ago. Recoveries were at INR 890 million compared to INR 2.35 billion a quarter ago.
RBL Bank's bottom line for the reporting quarter was also dented by a fall in its core income and net interest income. Net interest income for Apr-Jun fell 13% on year to INR 14.81 billion. However, other income of the bank rose 33% to INR 10.69 billion in the quarter, boosted by treasury income. The net interest margin of the bank fell, mirroring the fall in net interest income, to 4.50% in Apr-Jun from 4.89% a quarter ago and 5.67% a year ago.
In terms of total business, advances of the bank rose 9% on year to INR 944.31 billion, with secured retail loans rising 23% on year. The retail-to-wholesale advances ratio was at 60:40. Unsecured retail loans were down 10% on year. Wholesale advances grew 15% to INR 378.07 billion as of Jun. 30 and retail advances grew 5% to INR 566.25 billion, despite a decline in unsecured retail loans.
Total deposits of the bank rose 11% on year to INR 1.13 trillion, with the low-cost current account savings account loans growing at the same rate to INR 366.14 billion. The bank's current account savings account ratio was at 32.5% at the end of June. Cost of deposits for the bank was unchanged at 6.53% from both a quarter ago and a year ago.
The bank said it was well capitalised for medium-term growth with healthy liquidity. The total capital adequacy ratio improved 3 basis points to 15.59% from 15.56% year ago. The common equity tier-I ratio improved 20 bps on year to 14.05% in Apr-Jun. The average liquidity coverage ratio for Apr-Jun was at 152%.
On Friday, shares of RBL Bank closed at INR 263.14 on the National Stock Exchange, down nearly 2% from the previous close. End
Edited by Nishant Maher
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