RBL Bank warns of credit card slippages to continue for next two quarters

RBL Bank flagged continued stress in its credit card portfolio during the December quarter, warning that elevated slippages could persist over the next two quarters, even as gold loan disbursals gathered momentum and margins showed signs of stabilising.

Speaking at the post-earnings concall, Managing Director and CEO R Subramaniakumar said credit card slippages remained slightly elevated due to broader macro trends, though leading indicators were showing improvement. “We are okay with the trends we are seeing,”

he said, while cautioning that similar levels of slippages could continue in the near term.

At the same time, the bank highlighted steady traction in gold loans, with branch-led disbursals running at a monthly pace of ₹225–250 crore. Management said the segment has the potential to scale meaningfully as branch expansion continues.

For the December quarter, RBL Bank reported a net profit of ₹214 crore, missing the CNBC-TV18 poll estimate of ₹265 crore, though sharply higher than ₹33 crore a year earlier. Net interest income rose 4.6% year-on-year to ₹1,657.2 crore, slightly ahead of estimates.

Asset quality improved sequentially, with gross non-performing assets declining to 1.88% from 2.32% in the previous quarter, while net NPAs edged lower to 0.55% from 0.57%. In absolute terms, gross NPAs fell to ₹1,961.5 crore from ₹2,377.6 crore, and net NPAs declined to ₹567 crore.

The bank’s capital and liquidity position remained comfortable, with the credit-deposit ratio at 86.1%. Subramaniakumar said RBL is consciously moderating risk, with the unsecured book currently at around 26% of advances and expected to trend towards 25% or lower.

On growth strategy, the management said retail secured assets will grow at a faster pace, supported by branch expansion and a sharper focus on granular deposits. Retail and wholesale advances stood at a mix of 59:41, with wholesale loans growing 21% year-on-year, while retail advances rose 10%.

Net advances grew 14% year-on-year and 3% sequentially in Q3. The bank also reduced its IBPC outstanding sharply to ₹1,500 crore from ₹4,500 crore earlier.

On margins, management said nearly 46% of loans are on fixed rates, providing insulation against volatility. Term deposits are expected to reprice further in the March quarter, with net interest margins seen improving marginally in Q4.

Shares of RBL Bank ended higher ahead of the results announcement, closing at ₹23.45 on the NSE on Friday.