RBL Bank's net profit for the September quarter fell 24 per cent to Rs 223 crore on Saturday as a result of problems with the quality of its credit cards and microlending books.

In the most recent June quarter, the private sector lender reported a profit after tax of Rs 372 crore, up from Rs 294 crore a year earlier.

Net interest income and margin

Net interest income increased only 9 per cent to Rs 1,615 crore during the quarter, despite a 15 per cent growth in advances. The major cause of the softer increase was the MFI and credit card asset quality problems.

The bank official stated that it might take up to nine months before the net interest margin returns to the 5.4–5.5 per cent range after it shrank to 5.04 per cent during the reporting quarter from 5.54 per cent during the same period last year.

Deposites and capital adequacy

The bank announced a 20 per cent increase in deposits and made it apparent that the goal is to draw in granular and non-bulk liabilities.

The bank stated that rather than concentrating solely on portfolio growth, it will now look at the quality front and try to get more business from the same customer. The credit card portfolio will grow at the same rate as or more slowly than the overall asset growth.

As of September 2024, the bank's total capital adequacy was 15.92 per cent, with core buffers at 14.19 per cent. The bank also stated that it will not be considering a new infusion for at least a year.

Other income and provisions

The other income, which increased by 32 per cent to Rs 618 crore, was a significant contributor to making up for the interest income reverses.

The increased stress in asset quality caused the overall provisions to soar to Rs 618 crore, and the bank management directed the third quarter's credit costs to perform nearly similarly.