RBL Bank Shares in Spotlight After Q2 PAT Falls 24% Year-on-Year

RBL Bank Shares in Spotlight After Q2 PAT Falls 24% Year-on-Year

Shares of RBL Bank are expected to draw attention after the bank reported a 24% year-on-year (YoY) decline in its profit after tax (PAT) for the second quarter of FY25. The bank posted a PAT of Rs 223 crore, down from Rs 293 crore in the same period last year.

Despite the drop in profits, the bank's net interest income (NII) saw a 9% YoY growth, reaching Rs 1,615 crore during the quarter. The bank’s net interest margins (NIMs) remained robust at 5.04%.

The decline in profitability comes amid higher provisioning for bad loans, with RBL Bank increasing its provisions to Rs 587 crore, a rise from Rs 456 crore in the previous year. The gross non-performing asset (NPA) ratio also showed a slight uptick, increasing to 3.33% from 3.27% in Q2 FY24, while the net NPA ratio remained relatively stable at 1.08%.

RBL Bank's advances grew by 18% YoY to Rs 72,457 crore, with the retail segment continuing to be the main growth driver. Retail loans expanded by 24%, constituting around 54% of the total loan book. Deposits also saw a steady rise, increasing by 16% to Rs 88,562 crore, led by growth in the low-cost current account and savings account (CASA) deposits, which now make up 34% of total deposits.

Despite challenges in the form of higher provisioning and the marginal rise in NPAs, the bank remains optimistic about its long-term growth prospects, driven by strong advances in the retail segment and increasing customer deposits.