Private sector lender RBL Bank on Saturday reported 86 per cent year-on-year (y-o-y) and 85 per cent quarter-on-quarter (q-o-q) fall in net profit for Q3FY25 at ₹33 crore, led by higher slippages in microfinance and credit card segments and subsequent provisions.
The bank’s fresh slippages stood at ₹1,309 crore in Q3, with bulk of non-performing assets (NPAs) coming from the micro loans and credit card segment. Accordingly, provisions rose to₹1,189 crore from ₹618 crore last quarter.Of this, ₹414 crore of provisions were made specifically for joint liability group (JLG) microfinance loans. Gross and net NPA ratio rose to 2.92 per cent and 0.53 per cent, respectively, as on December 31.
Macro factors at play
“We are in control of things to generate pre-provision operating profit. What has really happened is not majorly due to our internal handling, it is majorly due to macro factors and slightly due to transition from Bajaj portfolio in Q2 (RBL Bank stopped Bajaj Finance co-branded credit card partnership),” said R. Subramaniakumar, MD & CEO, RBL Bank.
- Also read: IndusInd Bank CFO Gobind Jain resigns
“Our stated focus is definitely on secured portfolio growth, whose share in overall book has increased in last 3-4 quarters by around 4 per cent. This has come by measured growth in microfinance and cards,” he said. The MD added that if additional guidelines issued by microfinance sector self-regulatory bodies are implemented across lenders, over leveraging issue of borrowers could be addressed.
Further, RBL Bank’s net advances grew 13 per cent y-o-y to ₹90,412 crore, whereas deposits rose 15 per cent y-o-y to ₹1.06 lakh crore. The bank has lowered guidance on loan growth for the current fiscal to 10-13 per cent from 18 per cent earlier. Net interest income (NII) grew 3 per cent y-o-y to ₹1,585 crore, while other income rose 38 per cent y-o-y to ₹1,073 crore. Net interest margin (NIM), meanwhile, moderated to 4.90 per cent in Q3 from 5.04 per cent last quarter. The bank expects NIM to improve after 2-3 quarters.
