During Monday’s trading session, the shares of one of India’s leading private sector banks slumped nearly 14.7 percent to hit a new 52-week low at Rs. 175.15 on BSE, after the company reported Q2 FY25 financial results with a net profit declined by 34 percent QoQ and 30 percent YoY.
With a market cap of Rs. 10,756 crores, at 02:45 p.m., the shares of RBL Bank Limited were trading in the red at Rs. 177.05, down by nearly 13.8 percent, compared to its previous closing price of Rs. 205.45.
What’s the news:
The fluctuations in the share prices were also observed after RBL Bank Limited announced the financial results for Q2 FY25, through the latest filings with the stock exchanges on Saturday.
For Q2 FY25, RBL Bank reported a consolidated net interest income (NII) of Rs. 1,615 crores, reflecting a decline of around 5 percent QoQ from Rs. 1,700.6 crores in Q1 FY25, but an increase of about 9.5 percent YoY from Rs. 1,475.2 crores in Q2 FY24.
This NII was influenced by interest reversals due to asset slippages and reduced disbursements in microfinance.
The bank’s net profit for Q2 FY25 fell to Rs. 232 crores, representing a significant decline of around 34 percent QoQ from Rs. 351 crores in Q1 FY25 and a year-on-year decrease of nearly 30 percent from Rs. 331 crores in Q2 FY24.
Conversely, other income surged significantly by nearly 30.2 percent YoY, rising from Rs. 712.8 crores in Q2 FY24 to Rs. 928 crores in Q2 FY25, while on a quarterly basis, it increased by around 20 percent from Rs. 775 crores in Q1 FY25.
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Further, the bank’s CASA grew 13 percent YoY from Rs. 32,089 in Q2 FY24 to Rs. 36,224 crores in Q2 FY25, while the CASA ratio stood at 33.6 percent in Q2 FY25.
Focusing on secured retail assets and commercial banking, RBL Bank’s net advances grew 15 percent YoY to Rs. 87,882 crores, with the retail advances book expanding 24 percent YoY to Rs. 54,723 crores.
Commercial banking increased by 17 percent year-over-year, while housing loans surged by 56 percent YoY and rural vehicle finance grew by 58 percent YoY.
RBL Bank’s gross non-performing asset (NPA) ratio improved to 2.88 percent in Q2 FY25, as against 3.12 percent in Q2 FY24, reflecting a 25 bps improvement in a year. The net NPA ratio stood at 0.79 percent in Q2 FY25, compared to 0.78 percent in Q2 FY24, representing a slight increase of 1 basis point YoY.
Management Guidance:
From FY24-26, RBL Bank aims to achieve a compound annual growth rate (CAGR) of over 20 percent for both advances and deposits.
The bank expects its return on assets (RoA) to rise between 1.4 and 1.5 percent, and its return on equity (RoE) to fall between 14 and 15 percent by FY26.
Additionally, RBL Bank plans to double its customer base to 26 million, up from the current 16.06 million, while expanding its touchpoints to 2,600, an increase from the current 1,882. The bank also seeks to raise its share of new businesses by 30 percent.
Stock Performance:
The stock has delivered negative returns of nearly 23.3 percent in one year, as well as around 31.6 percent returns in the last six months. So far in 2024, the shares of RBL Bank have given negative returns of about 38 percent.
About the company:
Incorporated in 1943, RBL Bank Limited is engaged in the business of providing a wide range of banking and financial services including wholesale banking, retail banking, treasury operations and other banking-related activities.
The bank offers specialised services under five business verticals namely: Corporate Banking, Commercial Banking, Branch & Business Banking, Retail Assets and Treasury & Financial Markets Operations.
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Written by Shivani Singh
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