Shares of RBL Bank Ltd. dropped almost 3% on Monday, trading at ₹255.46 compared to its previous close of ₹263.14, after the lender reported disappointing Q1 FY26 results with profits impacted by higher provisions and rising expenses.
For the June quarter, RBL Bank posted a net profit of ₹200 crore, down 46% year-on-year from ₹371.5 crore in Q1 FY25, though recovering from ₹69 crore in Q4 FY25. CEO R Subramaniakumar expressed optimism about margins improving from Q3 onwards, citing recent deposit rate cuts and ongoing cost optimisation efforts that are expected to reflect in the coming quarters.
The bank’s total income for Q1 FY26 stood at ₹4,510 crore, marginally up from ₹4,476 crore in Q4 FY25. Interest income held steady at ₹3,441 crore, while other income rose to ₹1,069 crore from ₹1,000 crore sequentially. Operating profit before provisions came in at ₹702.9 crore, down from ₹861 crore in Q4 and ₹859 crore in the year-ago quarter.
Provisions for the quarter stood at ₹442 crore — lower than ₹785 crore in Q4 but higher than ₹366 crore last year. Gross NPAs increased to ₹2,685.9 crore from ₹2,377.8 crore last year, while net NPAs improved to ₹428.8 crore from ₹638.9 crore a year earlier. GNPA ratio remained stable at 2.78%, and net NPA ratio improved to 0.45% from 0.74% YoY.
Return on Assets (RoA) declined to 0.56% from 1.14% last year. During the quarter, the bank transferred stressed credit card and corporate loans to ARCs, aiding asset quality.
CEO Subramaniakumar reassured investors, saying, “Margins have bottomed out, and we should see an improvement from Q3. The recent cut in deposit rates and our cost optimisation measures will start reflecting positively from Q2 and Q3.”
RBL Bank’s capital adequacy ratio stood at 15.42%, with net worth at ₹14,957 crore.
Investors reacted negatively to the results, sending the stock lower in early trade amid broader weakness in banking names after several lenders reported mixed quarterly performances.
