RBL Bank Q2 FY25 Earnings: Shares Drop 12% Amid 24% Profit Decline

On October 21, shares of RBL Bank Ltd share price dropped by as much as 12% after the bank reported a 24% decrease in net profit than the same quarter last year.

In the same quarter last year, RBL Bank reported a net profit of ₹294.1 crore, according to a regulatory filing. Net interest income (NII), which is the difference between what the bank earns from loans and what it pays to depositors, increased by 9.5%, reaching ₹1,615 crore compared to ₹1,475 crore in the same quarter of FY24.

The gross non-performing assets (GNPA) rose to 2.88% in the March quarter, up from 2.69% in the December quarter. The net NPA was 0.79%, slightly higher than 0.74% from the previous quarter.

In monetary terms, RBL Bank’s gross non-performing assets (GNPA) reached ₹2,581.1 crore, up from ₹2,377.82 crore from the previous quarter. The net non-performing assets (NPA) rose to ₹697.5 crore, compared to ₹638.9 crore in the last quarter. The net interest margin (NIM) was 5.04%, down from 5.54% year-on-year and 5.67% quarter-on-quarter.

The bank’s total deposits increased by 20% year-on-year, reaching ₹107,959 crore as of Q2 FY25. Current Account and Savings Account (CASA) deposits grew by 13% year-on-year to ₹36,224 crore, resulting in a CASA ratio of 33.6%.

Granular deposits, which are deposits of less than ₹3 crore, rose by 22% year-on-year and 4% quarter-on-quarter, totalling ₹52,223 crore, making up 48.4% of all deposits.

RBL Bank’s net advances increased by 15% year-on-year to ₹87,882 crore, with retail advances growing by 24% year-on-year to ₹54,723 crore. The mix of retail to wholesale advances was 62:38. Retail disbursements for the first half of FY25 were ₹8,400 crore, down from ₹9,788 crore in the first half of FY24.

In Q2 FY25, RBL Bank’s retail disbursements reached ₹4,248 crore, a slight increase from ₹4,152 crore in Q2 FY24. Housing loans grew by 56% year-on-year, while rural vehicle financing increased by 58% year-on-year. Commercial banking advances also rose by 17% year-on-year. The bank’s customer base expanded to 16.06 million as of September 30, 2024, up from 14.31 million the previous year.

The bank’s capital adequacy ratio improved to 15.9%, up from 15.6% as of June 30, 2024, including profits from H1 FY25. The Common Equity Tier 1 (CET 1) ratio increased to 14.2% from 13.8%. RBL Bank maintained an average Liquidity Coverage Ratio (LCR) of 133% for H1 FY25 and 129% for Q2 FY25.

The Provision Coverage Ratio, which includes technical write-offs, was at 89.35%. The credit cost for H1 FY25 was 140 basis points (bps), while it was 80 bps for Q2 FY25. Total provisions, which include specific, general, and contingent provisions, amounted to 102% of the bank’s gross non-performing assets (GNPA). As of September 30, 2024, RBL Bank had 1,882 total touchpoints, including 550 bank branches and 1,332 business correspondent branches. Out of the 1,332 BC branches, 297 are banking outlets.

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