RBL Bank Q3 FY26 Results: Net profit rises 5.5x to Rs 214 crore; asset quality improves, NII grows 5%

RBL Bank

• RBL Bank Q3 FY26 net profit surged 5.5 times to Rs 214 crore
• Asset quality improved with GNPA down to 1.88 percent from 2.32 percent
• Shareholders approved capital infusion, merger with Emirates NBD India branches.

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RBL Bank on Saturday reported its standalone net profit ballooned 5.5 times to Rs 214 crore for the quarter ended December 31, 2025 (Q3 FY26). The rise in profit was supported by steady core operating performance and a sharp improvement in asset quality, even as earnings were impacted by one-off employee-related expenses.

The private sector lender said profit for the quarter was affected by a one-time pre-tax expense of Rs 32 crore following a revision in the definition of wages under the new labour codes, effective November 21, 2025. In the year-ago quarter, the bank had reported a net profit of Rs 33 crore.

During the media call on January 17, on being asked about synergies being explored with Emirates, the bank said it continuously evaluates partnerships across geographies, including with international players, as part of its ongoing business strategy, adding that there was nothing specific or exceptional to highlight at this stage.

RBL Bank's net interest income (NII), a key measure of a bank’s core earnings, rose 5 percent year-on-year and 7 percent sequentially to Rs 1,657 crore during the December quarter. Net interest margin (NIM) stood at 4.63 percent, compared with 4.51 percent in the previous quarter.

Ahead of the quarterly results, RBL Bank shares climbed over 4 percent on Friday to end at Rs 324.5 on NSE. The stock has more than doubled in last one year.

Other income, excluding a one-off gain from the sale of a strategic equity investment in Q3 FY25, grew 13 percent both year-on-year and quarter-on-quarter to Rs 1,050 crore. Core fee income increased 10 percent from a year earlier and 3 percent sequentially to Rs 959 crore.

Operating expenses rose 8 percent year-on-year and 2 percent quarter-on-quarter to Rs 1,795 crore. However, cost efficiency improved, with the cost-to-income ratio declining to 66.3 percent in Q3 FY26 from 70.7 percent in the September quarter.

Operating profit, adjusted for the one-off income booked in Q3 FY25, grew 7 percent year-on-year and 25 percent sequentially to Rs 912 crore.

Balance sheet growth remained healthy, with net advances increasing 14 percent year-on-year and 3 percent sequentially to Rs 1.03 lakh crore. The retail-to-wholesale advances mix stood at 59:41.

Within the retail portfolio, secured retail advances grew 24 percent year-on-year. Unsecured retail advances declined 5 percent on a year-on-year basis but rose 1 percent quarter-on-quarter. Overall retail advances grew 10 percent year-on-year to Rs 60,611 crore.

Wholesale advances rose 21 percent year-on-year and 5 percent sequentially to Rs 42,475 crore, led by commercial banking, which recorded 30 percent year-on-year growth.

On the liabilities side, total deposits increased 12 percent year-on-year and 3 percent sequentially to Rs 1.2 lakh crore. CASA deposits grew 6 percent year-on-year but declined 1 percent sequentially to Rs 36,972 crore, with the CASA ratio at 30.9 percent.

Granular deposits -- defined as deposits below Rs 3 crore -- continued to grow faster than the overall book, rising 15 percent year-on-year and 4 percent sequentially to Rs 61,632 crore, accounting for 51.5 percent of total deposits.

Asset quality improved meaningfully during the quarter, with gross non-performing assets (GNPA) declining 45 basis points quarter-on-quarter to 1.88 percent as of December 31, 2025, from 2.32 percent at the end of September. Net NPA stood at 0.55 percent, marginally lower than 0.57 percent in the previous quarter. The provision coverage ratio, including technical write-offs, remained strong at 93.2 percent.

Capital adequacy remained stable, with the total capital adequacy ratio at 14.94 percent as of December 31, 2025, compared with 15.02 percent three months earlier. The CET-1 ratio stood at 13.45 percent, while the average liquidity coverage ratio for the quarter was 125 percent.

Commenting on the results, MD and CEO R Subramaniakumar said, "We continued to deliver strong growth in our focus areas, with secured retail advances and commercial banking driving asset side expansion while granular deposits supported on liability side. The collection efficiency in our JLG (joint liability group) business has materially improved and disbursal run-rate are now close to normalised levels."

RBL Bank also said it has received shareholder approval for a proposed capital infusion by Emirates NBD PJSC and for the amalgamation of Emirates NBD’s Indian branches with RBL Bank, and is currently awaiting regulatory approvals for the same.

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