Citi has reiterated a Buy rating on RBL Bank, with a target price of ₹255, as the bank transitions its credit card business after terminating its co-branded partnership with Bajaj Finance (BAF). This partnership contributed to 50-55% of RBL’s ₹175 billion credit card receivables. While the bank will continue servicing the 3.4 million cards issued through the partnership, Citi highlights RBL’s strategy to grow its credit card portfolio by 10-15% in the near term through direct sourcing and new partnerships.
Citi believes the exit reflects regulatory tightening in co-branded arrangements and RBL’s efforts to diversify its portfolio. Management aims to rationalize its credit card business to achieve better profitability, especially as the card business’s Return on Assets (RoA) normalizes by 1QFY26.
The termination comes amid broader industry adjustments to regulatory requirements for co-branded products. RBL’s ability to scale its direct sourcing and new partnerships will be critical in offsetting the impact of this shift.
