RBL Bank Q3 results: Net profit plummets 86% on-year led by sharp rise in provisions

RBL Bank on 18 January reported an 86% year-on-year (YoY) decline in its net profit to ₹32.63 crore for the third quarter of FY25, largely attributed to higher provisions. Sequentially, net profit dropped 85%.

Gross non-performing asset (NPA) ratio rose slightly to 2.92% as of 31 December 2024, compared to 2.88% in the previous quarter, but improved from 3.12% a year ago. Net NPA ratio fell to 0.53% from 0.79% in September 2024 and 0.80% in December 2023.

In absolute terms, gross NPAs increased to ₹2,701 crore as of 31 December 2024, from ₹2,581.08 crore in the preceding quarter. Net NPAs reduced to ₹481.64 crore from ₹697.51 crore during the same period.

The bank prudently made additional provisions of ₹414 crore for its Joint Liability Group (JLG) portfolio, raising NPA coverage for this segment to 85%. The overall Provision Coverage Ratio, including technical write-offs, stood at 93.46%, while credit cost rose to 139 basis points in Q3FY25.

Also read: Kotak Mahindra Bank Q3 Results: Net profit rises from last year, NII up 10%

Net Interest Income (NII) grew 3% YoY to ₹1,585 crore in Q3FY25, with Net Interest Margin (NIM) at 4.90%. For the nine-month period, NII rose 10% YoY to ₹4,900 crore, with NIM at 5.19%.

Other income surged 38% YoY to ₹1,073 crore in Q3FY25, while core fee income increased 19% YoY to ₹871 crore. Total deposits grew 15% YoY to ₹1.07 lakh crore, with Current Account Savings Account (CASA) deposits rising 12% to ₹35,022 crore. CASA ratio stood at 32.8%, while granular deposits (below ₹3 crore) increased 20% YoY to ₹53,719 crore, forming 50.3% of total deposits.

Net advances expanded 13% YoY to ₹90,412 crore, with retail advances growing 19% YoY to ₹55,199 crore. Retail-to-wholesale advances ratio stood at 61:39. Housing loans increased 33% YoY, rural vehicle finance rose 30%, and commercial banking advances grew 21%.

Despite subdued earnings, growth in deposits and advances underscores the bank's focus on building a stable, retail-heavy book.