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Last Updated : Jul 19, 2019 02:06 PM IST | Source:

Despite robust Q1 numbers RBL Bank tanks 9% amid corporate exposure deterioration fears

Given the difficult environment we do expect to face some challenges on some of our exposures in the near term, Vishwavir Ahuja, MD & CEO, RBL Bank said.

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Shares of private sector lender RBL Bank fell more than 9 percent intraday on July 19 after management guided for deterioration in corporate exposures in coming quarters despite robust Q1 numbers.

The stock lost more than 20 percent in the last three months. It was quoting at Rs 536.40, down 7.49 percent on the BSE at 1341 hours.

"The bank has had a good quarter of strong performance and has continued to maintain its growth momentum and improvement in operating metrics. However, given the difficult environment we do expect to face some challenges on some of our exposures in the near term," Vishwavir Ahuja, MD & CEO, RBL Bank said in a BSE filing.


While addressing a press conference, he said the bank sees a slight deterioration in corporate exposures in the next 2-3 quarters. "Tight liquidity & volatile equity market are impacting the liquidity of some of the clients."

"We could incur additional 35-40 bps credit cost owing to additional provisioning requirements. Gross NPAs could rise to 2.25-2.50 percent over the course of the year, but capital position continues to be comfortable," he said, adding issue is specific to certain corporates, not related to realty & energy segments.

Asset quality remained stable in Q1 as gross non-performing assets stood unchanged at 1.38 percent of gross advances and net NPA fell 0.65 percent against 0.69 percent on sequential basis. However, slippages remained high at Rs 225 crore at the end of June quarter against Rs 206 crore in Q4FY19.

Even write-offs were higher at Rs 147 crore in quarter gone by, against Rs 91 crore in the previous quarter.

Provisions for bad loans increased 6.6 percent sequentially and 52 percent YoY to Rs 213.2 crore in the quarter ended June 2019, but the provision coverage ratio improved to 69.13 percent in Q1FY20 against 65.30 percent in Q4FY19.

The private sector lender reported double-digit growth across key parameters. Profit in June quarter grew by 41 percent to Rs 267 crore and net interest income increased 48 percent to Rs 817.3 crore YoY with net interest margin being at an all-time high of 4.3 percent and healthy loan growth at 35 percent.

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First Published on Jul 19, 2019 02:06 pm
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