Earnings Review
RBL Bank Jan-Mar PAT sinks 81% as provisions double
This story was originally published at 17:47 IST on 25 April 2025
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--RBL Bank Jan-Mar net profit INR 687 mln
--Analysts saw RBL Bank Jan-Mar net profit INR 494.29 mln
--RBL Bank Jan-Mar net profit INR 687 mln vs INR 3.53 bln year ago
--RBL Bank Jan-Mar total income INR 44.76 bln vs INR 42.15 bln year ago
--RBL Bank Jan-Mar provisions INR 7.85 bln vs INR 4.14 bln year ago
--RBL Bank Jan-Mar provisions INR 7.85 bln vs INR 4.14 bln year ago
--RBL Bank to pay INR 1 per share dividend
--RBL Bank gross NPA ratio 2.60% as on Mar 31 vs 2.92% qtr ago
--RBL Bank net NPA ratio 0.29% as on Mar 31 vs 0.53% qtr ago
--RBL Bank Basel III capital adequacy ratio 15.54% as on Mar 31
--RBL Bank FY25 net profit INR 6.95 bln vs INR 11.68 bln yr ago
--RBL Bank FY25 total income INR 178.45 bln vs INR 154.37 bln year ago
--RBL Bank provision coverage ratio 89.02% as on Mar 31
--RBL Bank Jan-Mar average liquidity coverage ratio at 133%
--RBL Bank advances INR 926.18 bln as on Mar 31, up 10% on year
--RBL Bank deposits INR 1.11 tln as on Mar 31, up 7% on year
--RBL Bank Jan-Mar NII INR 15.63 bln rupees, down 2% on year
--RBL Bank Jan-Mar NIM at 4.89%, vs 4.90% qtr ago
--RBL Bank Jan-Mar credit cost at 93 bps
--RBL Bank: CASA ratio at 34.1% as on Mar 31 vs 32.8% as on Dec 31
--RBL Bank retail advances INR 557.03 bln as on Mar 31, up 13% on year
--RBL Bank: Jan-Mar cost of deposit 6.5% vs 6.6% in Oct-Dec
By Kabir Sharma and Kahipra Petkar
MUMBAI – RBL Bank's net profit for the March quarter was dented as provisions of the bank almost doubled from the year-ago period. This was the second consecutive quarter where the bank had to take a hit on its bottom line due to prudent provisioning for its Joint Liability Group loans--or JLG loans--which are micro loans made to a small group of borrowers.
The net profit of the bank fell 81% on year to INR 687 million in Jan-Mar as provisions rose 90% on year to INR 7.85 billion. "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%," the notes to accounts of the bank said.
Sequentially, the bottom line of the bank rose over four-fold from INR 110.54 million in the December quarter. This increase was even more than what was expected by analysts, who saw the bottom line rising to INR 494.29 million. The private sector lender had set aside more money than was required in Oct-Dec for its microfinance portfolio, which led to the sharp fall in net profit in that quarter.
When compared with the December quarter, provisions were down 34% in the March quarter, which supported the net profit. In terms of the balance sheet, the deposits of the bank were up 7% on year at INR 1.10 trillion as of Mar. 31 and the advances were up 10% on year to INR 926.18 billion.
Within advances, the retail-to-wholesale mix was at 40:60. The wholesale advances were up 6% on year at INR 369.15 billion, and the secured retail book was up 43% on year at INR 295.73 billion. The unsecured retail book was down 8% on year at INR 261.30 billion. Personal loan book fell by 17% on year and 13% on quarter to INR 32.45 billion and business loans were up 37% on year to INR 111.62 billion as of Mar. 31.
Within total deposits, the term deposits formed 66% of the total deposits, of the rest, 16% was by current account deposits and 18% the savings account deposits. The CASA ratio stood at 34.1%, higher than 32.8% a quarter ago. The liquidity coverage ratio of the bank stood at 133%, lower than 143% a quarter ago.
On the operating performance of the bank, the net interest income de-grew 2% on year to INR 15.63 billion. The net interest margin moderated to 4.89% in the latest quarter from 4.90% a quarter ago and 5.45% a year ago. Other income was up 14% on year at INR 10 billion in Jan-Mar.
The moderation in margins was due to a fall in yield on advances which fell to 13% in the reporting quarter from 14.1% a year ago. The cost of deposits have plateued and stood at 6.5% in Jan-Mar, tad down from 6.6% a quarter ago. In the corresponding quarter a year ago, the cost of deposits was 6.4%. Cost of funds were stable at 6.6%. Credit costs fell sharply to 93 basis points from 139 bps a quarter ago.
In terms of asset quality, the gross non-performing asset ratio was down 32 bps on quarter at 2.60% and the net non-performing asset ratio was down 24 bps on quarter at 0.29%. The provision coverage ratio including technical write-off was 96.4%. The bank reported fresh slippages of INR 10.58 billion, lower than INR 13.09 billion reported a quarter ago. The upgrades in the quarter were INR 930 million and the recoveries were at INR 2.35 billion. The bank wrote off loans worth INR 9.65 billion in the quarter ended March. Gross slippage ratio was at 1.15% in the reporting quarter.
The board has recommended a dividend of INR 1 per share. Friday, RBL Bank shares ended at INR 188.09 on the NSE, down 5.15%. End
Edited by Akul Nishant Akhoury
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