RBL Bank (RBLBANK) Q2 24/25 earnings summary

Executive summary

• Advances grew 15% YoY, with retail book up 24% YoY, driven by secured retail and granular liabilities growth; deposits rose 20% YoY.

• Net Interest Income for Q2 FY25 was ₹1,615 crore, up 9% YoY, with NIM at 5.04%; other income for Q2 FY25 was ₹927 crore, up 32% YoY.

• Net profit for Q2 FY25 was ₹223 crore, down 24% YoY, mainly due to higher provisions in cards and microfinance; H1 FY25 net profit at ₹594 crore, up 2% YoY.

• Unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2024, were approved and reviewed without qualification by joint statutory auditors.

• Results reflect adoption of revised RBI investment portfolio framework from April 1, 2024, impacting reserves and net worth.

Financial highlights

• NII for Q2 FY25 at ₹1,615 crore, impacted by lower microfinance disbursals and higher slippages in cards and microfinance.

• Other income for Q2 FY25 at ₹927 crore, up 32% YoY, driven by fee generation across FX, loan fees, and credit card spend.

• Operating profit for Q2 FY25 at ₹910 crore, up 24% YoY; operating expenses for Q2 FY25 at ₹1,632 crore, up 13% YoY.

• Gross NPA at 2.88% and Net NPA at 0.79% as of September 30, 2024; PCR at 73%.

• Provisions for Q2 FY25 at ₹618 crore, up 69% QoQ due to higher slippages in credit cards and microfinance.

Outlook and guidance

• Expect slippages in cards to materially reduce in Q3 and normalize by Q4; microfinance slippages may peak in Q3 and improve thereafter.

• Credit cost guidance for FY25 is 2.6%-3%, with normalization expected from Q4.

• Loan and deposit growth guidance maintained at 18%-20% for the year; targeting 20%+ CAGR in advances and deposits by FY26.

• ROA guidance for FY26 remains at 1.3%-1.4%, with current year expected to be below 1.1% due to transitional issues.

• The bank continues to focus on asset quality, capital adequacy, and compliance with revised RBI investment norms.