RBL Bank’s fiscal first-quarter net profit plunged 46% to Rs 200 crore amid a sharp dip in core income. 

Even in the preceding March quarter, the bank’s net profit had hit a low of Rs 69 crore while in the June quarter of 2024 it stood at Rs 372 crore.

The private sector lender’s weak performance in the last few quarters has been impacted by the unsecured retail loan segment, which offers high-margins but also comes at high risk. The bank has reduced this portfolio by 10% during the June quarter while growing by 23% in areas like secured retail loans.

RBL Bank saw a rise in bad loans during the first quarter of this fiscal. The asset quality deteriorated, with gross non-performing assets (NPAs) rising to 2.78% at the end of the June quarter, from 2.69% a year ago. Net NPA was at 0.45% from 0.74%.

Net slippages stood at Rs 918 crore in Q1FY26 compared to Rs 730 crore in the preceding quarter. Slippages were highest in credit cards and microfinance segments. 

Net interest margin (NIM) contracted to 4.50%, from 5.67% in a year ago and 4.89% a quarter ago. 

RBL Bank managing director and CEO R Subramaniakumar, however, believes that NIM has bottomed out and should improve from now on following a cut in deposit rates and shift in the loan mix to higher-yielding assets. There could be some moderation in Q2, but margins should start going up from Q3 onwards as the recent interest rate cut in deposits start showing an impact.

RBL Bank’s net interest income (NII), or the difference between interest earned and interest paid, fell 13% to Rs 1,481 crore in the April-June quarter from Rs 1,700 crore a year ago. It declined 5% sequentially from Rs 1,563 crore in the March 2025 quarter. 

The bank’s bottom line was helped by a 33% rise in other income which stood at Rs 1,069 crore in the June quarter.

As on 30 June 2025, the bank’s provision coverage ratio, including technical write-offs, stood at 94.2% compared to 90.04% a year ago.

The bank’s loan book grew 9% to Rs 94,431 crore.

Total deposits grew 11% to Rs 1.13 lakh crore, of which CASA (current account savings account) grew by 11% to Rs 36,614 crore.