RBL Bank (RBLBANK) Q2 24/25 earnings summary

Executive summary

• Advances grew 15% YoY, led by secured retail and granular liabilities, with retail book up 24% YoY; net interest income for H1 FY25 rose 14% YoY to ₹3,315 crore.

• 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.

• Deposit growth remained robust at 20% YoY, with granular deposits up 22% YoY and CASA ratio at 33.6%.

• Operating profit for H1 FY25 increased 28% YoY to ₹1,769 crore; Q2 FY25 up 24% YoY to ₹910 crore.

• Unaudited standalone and consolidated results for the quarter and half year ended September 30, 2024, were approved and reflect adoption of revised RBI investment portfolio framework.

Financial highlights

• Net Interest Income (NII) for Q2 FY25 was ₹1,615 crore, up 9% YoY; NIM at 5.04% in Q2 FY25.

• Other income for Q2 FY25 rose 32% YoY to ₹927 crore; core fee income up 21% YoY.

• Pre-operating profit for Q2 FY25 was ₹910 crore, up 24% YoY.

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

• Credit cost for Q2 FY25 was 80 bps, up from 59 bps last quarter.

Outlook and guidance

• Loan growth guidance maintained at 18-20% for FY25, targeting 20%+ CAGR in advances and deposits by FY26.

• ROA guidance for FY26 remains at 1.3-1.4%, but FY25 ROA expected to be below 1.1% due to current stress.

• Credit costs for FY25 expected in the 2.6-3% range, with normalization anticipated from Q4.

• Focus on asset quality, capital adequacy, and compliance with revised RBI investment norms.