RBL Bank slides 8% as provisions temper Q2 profit jump

RBL Bank shares fell as much as 8% to Rs 388 on the BSE on Tuesday after Q2 FY27 profit rose 170% to Rs 481.7 crore, an Oct. 13 Economic Times news article said.

The reaction matters because RBL Bank’s net interest income, the spread between lending income and deposit costs, rose 37.4% year on year to Rs 2,131 crore in Q2 FY27 from Rs 1,551 crore, while provisions increased to Rs 766.5 crore, the article said.

Profit for the September quarter rose from Rs 179 crore a year earlier, according to the Economic Times. The share decline shows investors were also weighing credit costs, capital deployment and the bank’s changing loan mix rather than only the headline earnings increase.

Asset-quality measures improved during the period, the article said. Gross non-performing assets, or loans classified as impaired before recoveries, fell to 1.02% from 1.3% in the previous quarter. Net non-performing assets declined to 0.29% from 0.37%.

The bank’s loan book expanded quickly. Net advances rose 42% year on year to Rs 1,42,314 crore, with retail advances up 32% to Rs 79,465 crore and wholesale advances up 56% to Rs 62,849 crore, the Economic Times said. Within retail, secured loans grew 52%, while unsecured lending rose 6%.

Deposits increased 34% year on year to Rs 1,56,272 crore. The current-account and savings-account ratio, a measure of lower-cost deposit funding, stood at 27.2%. Granular deposits, defined in the article as deposits below Rs 3 crore, rose 16% to Rs 68,877 crore and accounted for 44% of total deposits.

RBL Bank’s total capital adequacy ratio was 30.1% as of Sept. 30, down from 33.3% at the end of June, the Economic Times said. Its Common Equity Tier 1 ratio, the core equity buffer used by banks, declined to 29% from 32.2%.

The average liquidity coverage ratio, a measure of short-term liquid assets, was 148% for Q2 FY27.

Managing Director and Chief Executive Officer R Subramaniakumar said the quarter had growth across assets and liabilities, according to the article. He also said mobilisation of FCNR deposits, foreign-currency non-resident bank deposits, had improved the bank’s funding profile and gave it more flexibility to support future growth.

Nuvama retained its BUY rating and raised its target price to Rs 500 from Rs 470, the Economic Times reported. The brokerage cited the Emirates NBD acquisition and FCNR deposit mobilisation as factors that could improve scale, funding and margins. It said return on assets could reach 1% to 1.6% and return on equity could reach 7% to 11% over FY27 to FY29E.

Dolat Capital kept a Sell rating with a Rs 320 target price, implying 19% downside, according to the article. The brokerage raised earnings estimates because of lower operating expenses linked to a smaller unsecured-loan mix and stronger corporate-book growth, but said return on assets expansion may be limited after the capital raise.

The disagreement centers on whether stronger funding can offset pressure from the shift away from higher-yield unsecured loans. Dolat Capital said portfolio yield is below 12%, compared with about 21% for unsecured loans, and said the stock’s 1.4 times FY28 estimated price-to-book valuation already reflects normalized leverage.

The Economic Times article did not provide analyst names for the brokerage calls. It also did not give a dated next catalyst for RBL Bank beyond the reported Q2 FY27 results and balance-sheet data as of Sept. 30.

Source: news article, The Economic Times, Oct. 13, 2026