RBL Bank’s Q2 provisional results show strong business growth, with deposits up 34% and loans up 40%. However, the bank's CASA ratio fell to 27.2%, signaling that it is relying more on costlier funds, which investors will monitor for potential impacts on profitability.
RBL Bank has released its provisional business figures for the quarter ending September 30, 2026, showing significant expansion in both deposits and loan books. The lender reported that total deposits grew by 34% compared to the same period last year, reaching ₹1.56 trillion. Simultaneously, gross advances saw a strong 40% year-on-year increase, rising to ₹1.43 trillion.
While the expansion in loan volumes points to aggressive growth in both retail and wholesale segments, the shift in the bank's deposit mix is a key area for investors to note. The bank’s Current Account and Savings Account (CASA) ratio, which measures the proportion of deposits that come from low-cost savings and current accounts, fell to 27.2%. This is a decline from the 31.9% recorded in the same quarter last year and the 29.2% reported in the previous June quarter. A lower CASA ratio typically indicates that a bank is relying more heavily on term deposits, which are more expensive and can put pressure on the bank's Net Interest Margin (the difference between interest earned on loans and interest paid on deposits).
The bank’s strategy appears to involve maintaining a balanced approach to its loan book, with the mix between retail and wholesale advances settling at 56:44 for the quarter. Both segments showed strong momentum, with retail secured advances growing by 51% and wholesale advances rising by 55% compared to the previous year.
Despite the pressure on the funding mix, the bank’s liquidity profile appears robust. The average liquidity coverage ratio, a measure of the bank’s ability to handle short-term cash needs, improved to 148% for the quarter, up from 127% a year ago. This suggests that while the bank is aggressively scaling its operations and managing a higher cost of funds, it maintains a comfortable liquidity position.
Looking ahead, investors will be watching to see how this shift in the deposit mix impacts the bank's profitability and margins in the full financial results. The key monitorable will be whether the bank can maintain or improve its margins despite the higher cost of funding brought on by the lower CASA ratio. Additionally, when the full results are released, shareholders will look for updates on asset quality, as rapid loan growth is often scrutinized for potential future stress on the loan portfolio.