RBL Bank has unveiled an ambitious expansion strategy that will significantly increase its physical presence across the country over the next few years. The private sector lender has outlined clear targets for branch network growth while providing guidance on its credit cost outlook.

Branch Expansion Strategy

The bank's expansion roadmap demonstrates a commitment to strengthening its retail presence through strategic branch additions. The phased approach reflects a measured yet aggressive growth strategy designed to enhance customer accessibility and market penetration.

This expansion represents a substantial increase in the bank's physical infrastructure, with the institution planning to add 200 branches in the first phase, followed by another 200 branches in the subsequent year, and an additional 200 branches by FY28.

Credit Cost Outlook

RBL Bank has provided guidance on its asset quality expectations, indicating a stable credit cost environment in the near term. The bank anticipates that credit costs will remain steady during the early part of the next year, suggesting controlled risk management practices.

The institution expects potential improvements in credit costs during the second half of the year, primarily attributed to enhanced control measures in its microfinance operations. This improvement outlook reflects the bank's focus on strengthening its risk management framework, particularly in the microfinance segment.

Strategic Focus Areas

The bank's strategy encompasses both physical expansion and asset quality management. The branch expansion initiative aims to increase market reach and customer acquisition capabilities, while the focus on microfinance control demonstrates commitment to maintaining healthy asset quality metrics.

The planned growth trajectory positions RBL Bank for enhanced market presence while maintaining prudent risk management practices across its lending portfolio.

RBL Bank has outlined its strategic expectations for net interest margin improvement despite anticipated monetary policy changes. The bank's management has expressed confidence in achieving marginal gains in profitability metrics through tactical adjustments in its asset-liability management approach.

Net Interest Margin Outlook

The bank expects to achieve a slight improvement in its net interest margin despite the December 2025 repo rate cut. This positive outlook is underpinned by two key strategic initiatives that the bank believes will offset the impact of the anticipated rate reduction.

RBL Bank's approach focuses on optimizing both sides of its balance sheet to maintain profitability. The institution has identified specific areas where it can enhance margins through better pricing mechanisms and strategic asset allocation.

Strategic Initiatives for Margin Enhancement

The bank's margin improvement strategy centers on two primary areas:

The bank's management believes that better term deposit pricing will help manage funding costs more effectively. Simultaneously, the institution plans to increase its exposure to loans in high-yield assets, which should contribute to overall margin expansion.

Credit Card Portfolio Challenges

While the bank maintains an optimistic outlook on margins, it acknowledges ongoing challenges in its credit card business. The institution expects credit card delinquencies to remain elevated for an extended period.

The bank's assessment indicates that normalization in the credit card segment will be gradual:

• Delinquencies expected to stay high for two more quarters
• Normalization timeline projected by September
• Ongoing monitoring of portfolio performance

Market Positioning Strategy

RBL Bank's approach reflects a balanced strategy of managing both opportunities and challenges in the current banking environment. The institution's focus on high-yield assets demonstrates its commitment to maintaining profitability while navigating sector-wide pressures.

The bank's strategic positioning involves careful balance sheet management to optimize returns while addressing asset quality concerns in specific segments. This approach indicates the institution's focus on sustainable growth and risk management.