Private sector lender RBL Bank is targeting 1.4%-1.5% return on assets (RoA) and 14%-15% return on equity (RoE) by FY26 end as against 1% RoA and 8.4% RoE during Q2FY24, the bank’s management said in investor meetings.
To achieve the parameters by FY26, the lender would deliver over 20% year-on-year (YoY) growth in its advances and deposits, increase overall touchpoints to 2,600 from 1,600, and branch network from 514 as of FY23 end to 740 during the same period.
As of September end, RBL Bank’s overall loans stood at Rs 76,324 crore, up 21% YoY and 4% sequentially. Retail loans accounted for 58% of advances and wholesale loans formed the rest. By FY26, the share of wholesale loans will fall to 30% and retail loans would constitute the majority of the bank’s advances as its newer retail loan products like agricultural loans, gold loans, vehicle loan, and housing plus small business loans gain larger scale.
The lender’s rural vehicle finance business will expand to 14 states by FY26 from 9 states currently and the lender will target at least 7% market share in the region. Further, by FY26 the bank expects to increase its new credit card acquisition to 9 million, and spends to rise to Rs 3 trillion, which is 1.5x higher than spends till date.
The bank’s overall deposits, meanwhile, stood at Rs 89,780 crore as of September 30, up 13% YoY and low-cost current account and savings account (CASA) formed 35.7% of overall deposits. The lender said it aims to further increase the share of retail deposits below Rs 2 crore to 55% by FY26.
55% of the bank’s customer acquisition has moved digitally and this number will reach 85% to 90% in next couple of quarters, it said. On an overall basis, the lender plans to enhance its efforts in cross sales, maintaining market share in credit card and microfinance—its core lending products—and establish larger presence in semi-urban and rural areas.