The lender earned an interest income of Rs 1,657 crore, marking a 5% increase from Rs 1,585 crore it posted in the corresponding quarter of the previous year. The company’s NIM or net interest margin was 4.63%, lower by 33 basis points from 4.90% it reported in the third quarter of the previous financial year, the company said in a regulatory filing.
Asset quality improved during the quarter, with the gross NPA ratio declining to 1.88% as of December 31, 2025, from 2.32% at the end of September 2025. The net NPA ratio also edged lower to 0.55% from 0.57% over the same period. The provision coverage ratio, including technical write-offs, stood at a healthy 93.2%.
What are analysts saying?
Motilal Oswal has maintained a Buy rating on RBL Bank with a target price of Rs 370, an upside of 14% from current levels. This comes despite the bank reporting an earnings miss due to higher provisions. Pre-provision operating profit (PPoP) was better than expected, supported by strong other income. Business growth remained modest in the quarter; however, management has guided for healthy expansion ahead, with wholesale advances seen growing at 20–25% YoY and retail advances at 25–30% YoY. The bank also plans to scale its unsecured portfolio at a calibrated pace. A comfortable credit–deposit ratio and the proposed capital infusion from Emirates NBD are expected to support improved credit growth. With an aggressive provisioning strategy, asset quality is likely to improve over time, while slippages should decline gradually as conditions in unsecured lending stabilise. The cost-to-income ratio continues to trend down as the bank has largely shifted its collections in-house.
Elara Capital has retained an Accumulate rating on RBL Bank while raising its target price to Rs 345, describing the Q3FY26 performance as a mixed bag with upside expected to unfold gradually. Core PPoP was steady, but higher slippages and elevated credit costs weighed on the quarter. Positively, net interest income rose 7% QoQ, aided by a 12 bps QoQ expansion in NIM, driven by lower funding costs and steady loan growth. Asset quality outcomes, however, were softer, with elevated slippages largely stemming from the credit card portfolio. Elara notes that RBL Bank is emerging from a prolonged phase of consolidation and balance-sheet reorientation and appears to be at an inflection point, with early signs of stability across key operating metrics. While pending approvals and multiple moving parts suggest a gradual recovery, the brokerage sees improving prospects as it rolls forward estimates to December 2027E.
RBL Bank share price has risen 25% in the last 6 months.(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)