RBL Bank shares hit a 52-week low as Q3 net profit falls 86% YoY

RBL Bank reported subdued numbers for Q3FY25 across the board. Net interest income remained muted at ₹1585 crore. The muted growth in NII was largely due to a 25% YoY jump in interest expenses at ₹1951 crore. The NIM’s for the quarter ended also contracted to 4.9% in Q3FY25 compared to 5.52% in Q3FY24 and 14 bps drop sequentially from 5.04%. The net interest margins for the bank have seen a sharp drop from 5.67% in Q1FY25 to 4.9%, indicating pain in the asset quality and realisations for the bank.

Nearly two-fold jump in provisions

The total provisions against contingencies and non-performing assets jumped nearly 160% from ₹458 crore in Q3FY24 to ₹1,188 crore in Q3FY25. It also doubled sequentially from ₹618 crore in Q2FY25. The sharp rise was largely due to the provisioning of ₹414 crore for the JLG (Joint Liability Group) segment.

Consequently, the quarter's net profit declined 86% YoY to ₹32.6 crore, compared to ₹233 crore in the previous year's similar quarter and ₹222 crore in the previous quarter.

Asset quality under stress

The total gross NPAs for the quarter ended December 2024 jumped 5.8% YoY to ₹2,701 crore. The GNPA ratio for the quarter dropped from 3.12% in Q3FY24 to 2.92% in Q3FY25. However, the ratio increased sequentially from 2.88% in the previous quarter, indicating pain in asset quality. The slippage ratio for the bank also jumped from 0.88% in Q3FY24 to 1.55% in Q3FY25.

Advances and deposits growth

Despite the weak numbers on the bottom-line front, the advances and deposit growth remained strong for the bank. The total advances for the bank jumped 13% YoY to ₹90,412 crore, and the deposits jumped 15% YoY to ₹106,753 crore. The LDR (loan-to-deposit ratio) for the bank stood at 143%. Among the advanced growth, the retail assets and secured retail segment saw strong growth at 19% and 38% YoY.