RBL Bank Shares Slide Following 24% Q2 Profit Decline

21 Oct 2024 , 03:49 PM

RBL Bank’s share price dropped by over 14% on October 21, 2024, following the announcement of a 24% decline in net profit for the September quarter, amounting to ₹223 Crore.

The bank had posted a net profit of ₹294 Crore in the same quarter last year and ₹372 Crore in the preceding June quarter.

On October 21, RBL Bank stock hit an intraday low of ₹176.5 per share on the NSE, marking a 14.01% decline and touching a 52-week low. It opened with a loss of 5.97% during the trading session.

The gross non-performing assets (NPA) ratio improved slightly, dropping by 0.25% to 2.88%, while advances grew by 15%. However, core net interest income only rose by 9% to ₹1,615 Crore due to challenges in the microfinance and credit card segments.

The net interest margin narrowed to 5.04% in the quarter, down from 5.54% a year ago, with management predicting it could take nine months for margins to recover to the 5.4-5.5% range.

Other income surged by 32% to ₹618 Crore, helping to balance out slower interest income growth. Provisions increased to ₹618 Crore due to heightened stress on asset quality, with similar trends expected in the third quarter. Deposits grew by 20%, with a focus on attracting non-bulk, granular liabilities.

The bank plans to shift its credit card strategy towards improving portfolio quality through existing customers rather than expanding the portfolio.