Concall AI

RBL Bank — Q3 FY26 earnings call

Call held 17 Jan 2026

Management summary

RBL Bank reported a strong Q3 FY26 with robust net advances growth of 14% YoY and a sequential NIM expansion of 12 bps to 4.63%. Asset quality showed improvement with GNPA reducing to 1.88%, though credit card slippages remain elevated. The bank continues its branch expansion and granular deposit growth strategy, while awaiting regulatory approvals for the Emirates NBD capital infusion.

Highlights

Net advances grew 14% year-on-year and 3% sequentially to ₹1,03,086 crores.
Net Interest Margin (NIM) increased by 12 bps sequentially to 4.63%.
Pre-Operating Profit (PPOP) was ₹912 crores, up 25% sequentially.
Gross Non-Performing Assets (GNPA) reduced by 45 bps quarter-on-quarter to 1.88%, and Net NPA reduced by 2 bps to 0.55%.
Credit card acquisitions reached over 1 lakh in a single month, with cards in force growing sequentially after 6-7 quarters of reduction.

Concerns

Credit card slippages remain slightly elevated and are expected to continue for 2 more quarters.
A gratuity provision of ₹30 crores impacted net profit for the quarter.
Provisioning coverage ratio (PCR) is at 71.1%, below the comfortable range of 75-78%.

Key financials

01 Net Advances ₹1.03L Cr +14%YoY
02 Total Deposits ₹1.20L Cr +12%YoY
03 NIM 4.6%
04 Net Interest Income (NII) ₹1,657 Cr +5%YoY
05 Net Profit ₹214 Cr
06 GNPA 1.9% -0.45%QoQ
07 Net NPA 0.55% -0.02%QoQ
08 Provisioning Coverage Ratio (PCR) 71.1%
09 Cost-to-Income Ratio 66.3%
10 Total Capital Adequacy 14.9%
11 CET1 13.4%

What they filed

Q1 FY27: revenue up 11.6%, net profit up 27.0% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	3,531	3,536	3,476	3,441	3,507 −1%	3,667 +4%	3,720 +7%	3,840 +12%
Expenses	2,251	2,851	2,487	2,290	2,255	2,434	2,463	2,290
Other income	927	1,073	1,000	1,069	933	1,050	1,069	959
Interest	1,916	1,951	1,913	1,960	1,957	2,010	2,049	2,186
Depreciation	0	0	0	0	0	0	0	0
Profit before tax	292	-192	76	261	229 −22%	273 +242%	277 +264%	324 +24%
Tax rate	24%	-117%	10%	23%	22%	22%	17%	22%
Net profit	223	33	69	200	179 −20%	214 +548%	230 +233%	254 +27%
EPS	3.66	0.54	1.13	3.29	2.91	3.47	3.72	1.64

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Segment	Growth	Sequential Growth
Retail Advances	10%	1%
Secured Retail Assets (adjusted for IBPC)	24%	1%
Business Loans + Housing Loans	34%	8%
Tractor Finance	23%	7%
Wholesale Banking Advances	21%	5%
Commercial Banking	30%	7%
Granular Deposits (<₹3 crores)	15%	4%
Branch Banking-led Deposits	18%	3%

Capital allocation

high confidence

M&A Emirates NBD Bank India branches Merger · Pending regulatory

Part of overall capital infusion transaction by Emirates NBD Bank, strengthening RBL Bank's position and expanding operations.
Amalgamation is part of a broader capital infusion and strategic partnership.

On the progress of announced capital infusion by Emirates NBD Bank, we received shareholder approval in November 2025 for the overall transaction, including the proposed capital infusion and amalgamation of Emirates NBD's India branches with the bank. Applications have been made for approval with other regulatory authorities, including Reserve Bank of India, Government of India, Competition Commission of India, SEBI, etcetera, and they are in various stages of progress.
Liquidity Liquidity disclosed Average LCR continues to be healthy at 125%. CD ratio stands comfortable at 86.1%.

The CD ratio stands comfortable at 86.1%. The granular deposits, which remain our focus area, grew 15% and constitutes 51.5% of total deposits. On asset side, secured retail assets grew 25% Y-o-Y, while unsecured advances have now stopped degrowing and it grew 1% sequentially. In the wholesale segment, our commercial banking business grew 30% Y-o-Y, driven by calibrated investments in relationships and credit teams across existing markets, along with the selective expansion into the new geographies.

Guidance & targets

Asset Quality

Credit Card Slippages Normalization Asset Quality · by September · Medium confidence Normalized

That stress, we made a very sharp assessment of it, and it will pick out in June, and thereafter, it starts trending down. So we will be by September, if you call it, it may be normalized number what we have been seeing it earlier. So June is what it will pick out. And Bikram, anything more to add?

— R. Subramaniakumar
Credit Card Slippages Asset Quality · next 2 quarters · High confidence Continue for 2 more quarters

The credit card slippages continue to be slightly elevated, and we expect this trend to continue for 2 quarters 2 more quarters.

— R. Subramaniakumar

Profitability

NIM Profitability · next quarter · High confidence Marginally better

And together with the improved disbursals in better yielding assets, we expect the margins to be marginally better in next quarter even after 25 bps repo cut in December 2025.

— R. Subramaniakumar

Deposits

Term Deposit Repricing Deposits · Q4 FY26 · High confidence Further reprice

The bank expects term deposits to reprice further in Q4 FY '26.

— R. Subramaniakumar

Branch Expansion

Total Branches Branch Expansion · by March · High confidence Around 600

We'll exit March with around 600 branches.

— R. Subramaniakumar
Total Branches Branch Expansion · by next March · High confidence Around 800

And by next March, a year after, it will be around 800.

— R. Subramaniakumar
Total Branches Branch Expansion · by third year · High confidence 1,000

And third year, we'll be exiting 1,000 branches.

— R. Subramaniakumar

Capital Infusion

Regulatory Approvals Capital Infusion · Q1 FY27 · Medium confidence Approvals will come

We feel that maybe in Q1 will be the right time for us to say that approvals will come.

— R. Subramaniakumar

Credit Growth

Overall Growth Post Capital Infusion Credit Growth · post capital infusion · Medium confidence Much above 25%

So with the capital, with an expansion of footprint, naturally, it has to be much above the 25% what you're talking about, another 10%.

— R. Subramaniakumar
Credit Card Book Growth Credit Growth · annually · High confidence 10% to 15%

I mean, we will be very comfortable with a 10% to 15% growth in the book and 1 lakh to 1.5 lakh. We should get to 1.5 lakh new card acquisition in a few months.

— Bikram Yadav
Credit Card New Card Acquisition Credit Growth · in a few months · High confidence 1 lakh to 1.5 lakh

— Bikram Yadav
Wholesale Banking Growth Credit Growth · near term · High confidence 20-25%

Okay. We have been growing wholesale at around 21%. So that is a minimum base and it can't go below that, and it is going to go up. So near term, it will continue to be in the range of 20%, 25%. Long term, it will be much higher.

— R. Subramaniakumar
Wholesale Banking Growth Credit Growth · long term · Medium confidence Much higher

— R. Subramaniakumar
Retail Secured Growth Credit Growth · near term · High confidence 25-30%

In respect of retail, we have been growing at around 30%, 25% to 30%. In near term, it will continue to be the same range.

— R. Subramaniakumar
Retail Secured Growth Credit Growth · long term · Medium confidence 5-10% higher

In long term, it will also go up by around another 5% to 10% or more.

— R. Subramaniakumar
Unsecured/JLG Growth Credit Growth · range · High confidence 10-15%

We reduced it from 36% to 24% 26%, which will come down somewhere in the range of around 22% to 25% in that range. If that is what we are looking at it, we will be growing in the range of around 10% to 15%.

— R. Subramaniakumar

Credit Cost

Credit Cost Credit Cost · next 2 quarters · Medium confidence Current range

I think on credit costs, maybe it's going to be 2 different halves next year because cards will play a role. So I guess the first half will be somewhat in the current range, maybe a little lower because microfinance is coming under control.

— Jaideep Iyer
Credit Cost Credit Cost · H2 next year · Medium confidence Significant improvement

But second half should start seeing a significant improvement on credit costs.

— Jaideep Iyer

Cost of Deposits

Cost of Deposits Cost of Deposits · Q4 · High confidence Further decline

We do expect cost of deposits to further decline in Q4 and therefore, should help to marginally improve the margins even though the full impact of the December repo rate cut will come in Q4 of this financial year.

— Jaideep Iyer
TD Benefit Cost of Deposits · another 2 quarters · High confidence Continue

So TD benefit should continue for another 2 quarters given the average maturity?

— Jaideep Iyer
TD Cuts Room Cost of Deposits · in this cycle · Medium confidence 30-35 bps

I would say 30, 35 bps is what we would have broadly as some more room to go in terms of overall TD cuts, cost of TDs coming down.

— Jaideep Iyer

Branch Profitability

Time to Profitability Branch Profitability · 18th month · High confidence 18th month

With the branches a distribution retail asset, we have a very calibrated plan of making the branches to become profitable on the 18th month.

— R. Subramaniakumar

What to watch in Q4 FY26

Credit Card Slippages Normalization

next 2 quarters / by September

Current Slightly elevated, expected to continue for 2 more quarters

Target Trending down, normalized by September

Why it matters

Normalization of credit card asset quality is crucial for overall profitability and credit cost reduction.

The credit card slippages continue to be slightly elevated, and we expect this trend to continue for 2 quarters 2 more quarters. ... That stress, we made a very sharp assessment of it, and it will pick out in June, and thereafter, it starts trending down. So we will be by September, if you call it, it may be normalized number what we have been seeing it earlier.

Risks & concerns

Elevated Credit Card Slippages
medium

Credit card slippages continue to be slightly elevated and are expected to persist for 2 more quarters, attributed to specific cohorts and past underwriting.

Management acknowledged
Lower Provisioning Coverage Ratio (PCR)
medium

The current PCR of 71.1% is below the bank's comfortable range of 75-78%, with management indicating plans to build it up.

Analyst acknowledged
CASA Ratio Pressure
low

The CASA ratio stands at 30.9%, with management noting industry-wide challenges and a focus on granular deposits to mitigate this.

Management acknowledged

Q&A highlights

6 direct

Deployment of excess liquidity and balance with other banks Partial

On the balance sheet front -- yes, on the first question, it's actually a single day phenomenon. So if I look at daily averages, I don't think it will be so stark. But some deployment of excess liquidity in a manner, which was more tactical at that point in time is more a consequence of that rather than anything from a structural to trying to read into that.

Analyst questioned the sharp increase in balance with other banks to ₹12,000 crores and whether it would be deployed into GSEC or loans, indicating a potential drag on asset utilization.

Asked by Rikin Shah

Provisioning Coverage Ratio (PCR) target and trajectory Direct

With regard to the PCR, if you look at it, we are normally comfortable between around 75% to 78%, which is what we have been maintaining it earlier. Maybe in the quarter to come, we will be building up to that extent. And with regard to the bank balance, I'll ask Jaideep to give you the details.

Analyst questioned the current PCR of 71% and management clarified their comfort range and intention to increase it, providing insight into future provisioning strategy.

Asked by Rikin Shah

Credit card asset quality normalization and growth Direct

I think the way I have described it, I don't think I have much more substance to add here, Jayant. Basically, we are saying that when we look at incremental portfolio that has been underwritten over the last couple of years and the early trends that we are seeing on that, those are coming quite under control. And there are as I mentioned, there are certain pockets of portfolios, which are exhibiting stress, and we expect that to resolve itself over the next 2 quarters.

Analyst pressed on the persistent elevated credit card slippages and the timeline for normalization, seeking clarity on the business's long-term growth trajectory and profitability.

Asked by Jayant Kharote

Impact of LCR changes on liquidity Partial

If I remember right, the task is going to give you a benefit of LCR release because it is going to move away from 100% outflow to the 40% outflow. And it is providing an opportunity for growth, plus it is going to give you a release of LCR. I don't think there is going to be a problem of LCR.

Analyst inquired about the net impact of changes in LCR runoff rates on MIB and wholesale deposits, seeking to understand potential liquidity release or requirements.

Asked by Jai Mundhra

Credit card collection infrastructure and asset quality Direct

So our collection muscle right now is fully developed and fully ready to manage a portfolio of this size with a reasonable growth. But the slippage is coming because of that cohort, which is giving a little bit of grief. Otherwise, we are reasonably in control over the portfolio.

Analyst questioned if the elevated credit card slippages were due to RBL's collection infrastructure compared to previous partners, providing clarity on the bank's internal capabilities.

Asked by Piran Engineer

Opex run rate for branch expansion Direct

So, yes, I think so let's say, simplistically, if you look at 200 branches for fiscal '27, we will look at an average rollout impact from a P&L standpoint of 100. And one should assume a INR60 lakh to INR70 lakh operating cost run rate per branch, and therefore, that will translate to INR60 crores to INR70 crores in FY '27.

Analyst sought clarification on the financial impact of the aggressive branch expansion plan (200 branches per year), leading to a quantified opex guidance for FY27.

Asked by Param Subramanian

Profitability of retail secured portfolio segments Direct

Shailesh, I think the prime housing followed by prime LAP, tractors is already profitable. Gold loan is getting to be profitable. I think LAP is profitable. Prime housing is yet to catch up. And small -- affordable housing and small LAP, given that it's a growth area, acquisition costs are still a little higher. Maybe that is just about breaking even.

Analyst asked for a product-wise breakdown of profitability for the retail secured portfolio, providing granular insight into which segments are contributing to profits and which are still maturing.

Asked by Shailesh Kanani

Confidence in credit card asset quality improvement Direct

Yes. So Shailesh, as we said, I think if we look at portfolio originated over the last couple of years, leading indicators on that portfolio, underwriting changes that we have done and being demonstrated in terms of early bucket, we are seeing other than some patches of cohorts, as we mentioned, we are looking at significant improvement in line with our expectations. So there is a clear visibility on improvement, which we see from September quarter onwards.

Analyst questioned the confidence in credit card asset quality improvement given past misses, leading management to reiterate their conviction based on recent underwriting and early indicators.

Asked by Shailesh Kanani

2 min read 6 chapters

Detailed narrative

Strong Advances and Deposit Growth

RBL Bank reported a robust performance in Q3 FY26, with advances growing 14% year-on-year and 3% sequentially to ₹1,03,086 crores. This growth was achieved after reducing IBPC outstanding from ₹4,500 crores to ₹1,500 crores. Deposits also saw healthy growth of 12% year-on-year and 3% sequentially, reaching ₹1,19,721 crores. Granular deposits, a key focus area, grew 15% and now constitute 51.5% of total deposits.

NIM Expansion and Cost of Funds Management

The bank's Net Interest Margin (NIM) increased by 12 basis points sequentially to 4.63% this quarter. This improvement was driven by rate actions taken in savings and repricing of term deposit rates, despite absorbing 100 bps of repo rate cuts until June 2025. Management expects the cost of deposits to decline further in Q4 FY26, contributing to marginally better margins in the next quarter.

Improved Asset Quality and Slippage Trends

Asset quality showed significant improvement, with Gross NPA (GNPA) decreasing by 45 basis points quarter-on-quarter to 1.88%, and Net NPA reducing by 2 basis points to 0.55%. Total net slippages were ₹711 crores, down from ₹918 crores in Q1 FY26. While credit card slippages remain slightly elevated, JLG slippages reduced to ₹124 crores, and net slippages in wholesale were negative ₹9 crores.

Credit Card Business Revival

The credit card business achieved a significant milestone by acquiring over 1 lakh cards in a single month for the first time since the cessation of the Bajaj partnership. Cards in force grew sequentially after 6-7 quarters of reduction, and monthly spends are comfortable at a run rate of ₹7,000 crores. Management expects credit card slippages to normalize by September, with a target of 10-15% growth in the book and 1-1.5 lakh new card acquisitions in a few months.

Strategic Branch Expansion and Retail Focus

RBL Bank accelerated its branch expansion, adding 18 branches in Q3 FY26, and plans to sustain this momentum to reach approximately 600 branches by March, 800 by next March, and 1,000 by the third year. This expansion aims to strengthen the physical footprint and support retail deposit growth. The bank is leveraging branches for asset growth, with gold loan disbursals reaching ₹225-250 crores monthly and RFL becoming a meaningful contributor to secured loan sourcing.

Capital Infusion and Future Growth Outlook

Shareholder approval for the capital infusion by Emirates NBD Bank was received in November 2025, with regulatory approvals from RBI, Government of India, CCI, and SEBI currently in progress. Management anticipates these approvals by Q1 FY27. Post-capital infusion, the bank expects overall growth to be significantly above the current 25%, with wholesale banking growing 20-25% in the near term and retail secured growing 25-30%.

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