RBL Bank is optimistic about a recovery in margins and profitability in the coming quarters, even as it reported a mixed set of numbers for the June quarter. The bank posted a net profit of Rs 200 crore in Q1 FY26, a sharp sequential rebound from Rs 69 crore in Q4, though still well below the Rs 371.5 crore earned in the year-ago period.
"Margins have bottomed out, and we should see an improvement from Q3," said MD & CEO R Subramaniakumar during the earnings call, speaking to Moneycontrol.
"The recent cut in deposit rates should start showing an impact in Q2 and Q3," he said.
“We’re also working on cost optimisation measures, and the benefits of those should begin to reflect from the end of Q2,” he added, responding to a query on the rise in operating expenses, which rose to Rs 1,847 crore in Q1 FY26 from Rs 1,646 crore in Q1 FY25.
He also reaffirmed the bank’s medium-term outlook, saying, "We remain confident of maintaining 14-15 percent growth going forward."
The bank’s total standalone income for the quarter stood at Rs 4,510 crore, slightly up from Rs 4,476 crore in Q4 FY25.
Interest income remained steady at Rs 3,441 crore, while other income including fees, commissions, forex earnings, and investment gains rose to Rs 1,069 crore from Rs 1,000 crore in the previous quarter.
Operating profit before provisions stood at Rs 702.9 crore, down sequentially from Rs 861 crore but sharply lower than the Rs 859 crore posted in Q1 FY25.
However, the bank’s performance was impacted by provisioning, which, at Rs 442 crore, was considerably lower than Rs 785 crore in Q4 FY25 but higher than Rs 366 crore in the year-ago quarter.
Gross Non-Performing Assets (GNPA) stood at Rs 2,685.9 crore in Q1 FY26, up from Rs 2,377.8 crore in the year-ago period, while Net NPAs rose to Rs 428.8 crore from Rs 638.9 crore.
The GNPA ratio was largely stable at 2.78 percent compared to 2.69 percent in Q1 FY25, while the Net NPA ratio improved to 0.45 percent from 0.74 percent a year earlier.
Return on Assets (RoA) stood at 0.56 percent, lower than 1.14 percent a year ago.
During the quarter, RBL Bank transferred a large volume of stressed credit card accounts and corporate loans to Asset Reconstruction Companies (ARCs), helping reduce stressed assets.
RBL Bank’s net worth stood at Rs 14,957 crore.
The bank allotted 11.3 lakh equity shares under its employee stock option plan during the quarter, marginally increasing its paid-up capital of Rs 609 crore.
The Capital Adequacy Ratio (CAR) stood at 15.42 percent, compared to 15.23 percent in Q1 FY25 and 15.54 percent in Q4 FY25.
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