RBL Bank Faces Profits Plummet Amid Microloan Challenges

RBL Bank's profits fell drastically in the Dec 2024 quarter, mainly due to microloan portfolio issues. Net interest margin dropped, and MFI slippages rose sharply. Despite these challenges, collection efficiencies improved towards quarter-end. The bank predicts stabilization within two quarters as lending decreases.

RBL Bank has reported a dramatic fall in net profit for the December 2024 quarter, dropping to Rs 47 crore from Rs 245 crore a year ago. The decline is attributed to challenges in the microloan portfolio, the city-based private lender announced.

The bank, enduring tough quarters due to increased credit costs, had a net profit of Rs 231 crore in the previous September quarter. Although core net interest income rose by 3% to Rs 1,585 crore, other income saw a significant 38% growth, aided by a stake sale in DAM Capital.

Despite the financial setbacks, RBL Bank's collection efficiencies improved to 97% in December. The bank estimates that normalization in the microfinance business will take up to two more quarters, with a slow-down in lending that could see its share of the overall portfolio dip moderately.

(With inputs from agencies.)