This article first appeared on GuruFocus .
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Net Advances Growth:23% year-on-year to INR 1,16,222 crore.
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Retail Advances Growth:13% year-on-year to INR 64,195 crore.
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Secured Retail Advances Growth:18% year-on-year.
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Wholesale Advances Growth:38% year-on-year.
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Total Deposits Growth:11% year-on-year to INR 1,24,829 crore.
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Net Interest Income (NII):Up 12% year-on-year to INR 1,634 crore.
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Other Income:Down 10% year-on-year to INR 959 crore.
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Core Income Growth:16% year-on-year to INR 923 crore.
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Total Net Income Growth:2% year-on-year to INR 2,640 crore.
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Operating Expenses (OpEx):Decreased 8% year-on-year to INR 1,691 crore.
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Cost to Income Ratio:64.7%, down from 65.1% last quarter.
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Pre-Operating Profit Growth:31% year-on-year to INR 923 crore.
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Net Profit Growth:27% year-on-year to INR 254 crore.
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Gross NPA (GNPA):Down 15 basis points Q-o-Q to 1.3%.
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Net NPA:Around 0.37%, down 2 basis points Q-o-Q.
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Credit Costs:54 basis points for the quarter.
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Total Capital Adequacy:33.3% post infusion by Emirates NBD.
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CET1 Ratio:32.2%.
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Release Date: July 17, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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RBL Bank Ltd ( BOM:540065 ) received a significant capital infusion of USD 2.75 billion from Emirates NBD Bank, enhancing its financial stability and growth potential.
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The bank's long-term credit rating was upgraded to AAA stable by ICRA, reflecting improved creditworthiness.
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Net advances grew by 23% year-on-year, indicating strong lending growth across retail and wholesale segments.
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The bank's asset quality improved, with Gross Non-Performing Assets (GNPA) down by 15 basis points quarter-on-quarter to 1.3%.
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RBL Bank Ltd ( BOM:540065 ) plans to leverage its partnership with Emirates NBD to expand its presence in the Middle East and target non-resident deposits, potentially boosting its deposit base.
Negative Points
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The bank's Net Interest Margin (NIM) contracted by 50 basis points over the last two quarters, partly due to a higher share of wholesale lending.
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Credit card slippages and credit costs remain elevated, with credit costs on cards at 11-12%, impacting profitability.
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The bank's CASA ratio declined quarter-on-quarter, indicating a potential challenge in mobilizing low-cost deposits.
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Operating income growth was modest, with total net income growing only 2% year-on-year.
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The bank's unsecured retail advances, including credit cards, have shown unpredictable slippage trends, raising concerns about asset quality in this segment.
Q & A Highlights
Q: How has the INR26,000 crore fund raised been deployed, and what are the plans for the remaining funds? A: R. Subramaniakumar, CEO, explained that INR10,000 crore was used to retire costlier liabilities with an average cost of 7.25%. The remaining funds are invested in short-term market instruments and will be redeployed into loans as the bank grows.
Q: What is the current status of CASA and IBPC, and how does the bank plan to address the decline in CASA? A: Jaideep Iyer, Executive Director, noted that CASA has been steady to slightly declining, with a focus on rationalizing savings account rates. The bank aims to improve low-cost deposits through NR deposits and expanding branches. The outstanding IBPC is about INR500 crore.
Q: What are the expectations for FCNR deposits, and how will Emirates NBD's involvement impact this? A: R. Subramaniakumar stated that the bank aims to achieve FCNR deposits 2 to 3 times its current market share, leveraging Emirates NBD's presence in the Middle East to attract more deposits.
Q: How does the bank plan to manage the margin contraction observed in recent quarters? A: Jaideep Iyer explained that the contraction was due to factors like repo rate cuts and credit card reversals. Going forward, the bank expects margins to improve by 30-40 basis points in Q2 due to equity infusion and cost of liabilities reduction.
Q: What is the outlook for credit card slippages and credit costs? A: Jaideep Iyer mentioned that credit card slippages have been elevated but are expected to decrease significantly from Q3 onwards, with credit costs normalizing to around 5% by then.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
