RBL Bank Shares Surge as Q3 Update Sparks Investor Optimism

Shares of RBL Bank rose 2.46% on Monday, January 6, closing at ₹166.80 apiece, following a positive response to the bank’s December quarter business update released over the weekend. With this rally, the stock marked its third consecutive day of gains, rising 5.6% so far in January.
Highlights from RBL Bank’s Q3 Business Update
RBL Bank reported robust growth in key metrics for the quarter ending December 31, 2024:
- Deposits Performance:
- Total deposits grew 15% year-on-year (YoY) to ₹92,746 crore.
- Deposits above ₹3 crore surged by 30% YoY to ₹44,882 crore, with a sequential growth of 3%.
- Deposits below ₹3 crore accounted for 50.3% of total deposits, emphasizing the bank’s focus on granular retail growth.
- Advances Growth:
- Retail advances grew 20% YoY, while wholesale advances increased by 5% YoY.
- Within wholesale, commercial banking advances posted a strong 21% YoY growth.
- Secured retail advances (excluding credit cards and microfinance) grew significantly by 37% YoY.
- Microfinance Efficiency:
- The collection efficiency in the microfinance segment improved to 98.4% in December 2024, compared to 97.51% in September 2024.
Challenges and Past Performance
Despite the positive Q3 update, RBL Bank faced challenges in Q2FY25, including:
- A 24% YoY and 40% quarter-on-quarter drop in standalone net profit to ₹223 crore.
- Declining net interest income due to interest reversals and lower disbursements in high-yielding segments.
- Provisions spiked by 69% QoQ to ₹640 crore, mainly due to slippages in credit card and microfinance portfolios.
The bank’s Q2 performance led to a sharp decline in its share price in October and November, but the positive Q3 update has renewed investor confidence, as evidenced by the recent stock performance.
RBL Bank’s strategic focus on growing retail deposits and advancing in high-growth segments could position it well for future stability and profitability.