The 21 reports from 9 analysts offering long term price targets
for RBL Bank Ltd. have an average target of 206.00. The consensus estimate
represents a downside of -20.40%
from the last price of 258.80.
We interacted with RBL Bank's management, which indicated that while the bank was still cautious on credit quality and growth outlook, it has steady fundamentals by healthy provisions cover and adequate capital buffer, which provides it cushion in the medium term. The bank expects slow traction on business loans, but traction on retail loans is better; falling cost of funds is likely to help maintain NIMs at present levels. RBL Bank currently trades at 1.2x/1.1x its FY2022E/FY2023E book value per...
RBL Bank Ltd. is a fast-growing private sector bank with a network of 386 branches and over 8.5 million customers. It offers various services, including corporate and institutional banking, commercial banking, retail banking,...
Background: RBL bank (RBL) came into operations in 1943 and was incorporated as a small, regional bank in Maharashtra with two branches in Kohlapur and Sangli. Post the change in the management team in 2010, it has been one among the fastest growing private sector banks and now has 392 interconnected branches and 389 interconnected ATMs spread across 28 Indian states and union territories serving ~8.4mn customers. The bank offers a comprehensive range of banking products and services customized to cater to the needs of large corporations, SMEs, agricultural customers, retail customers and development banking...
RBL Bank has reported PAT growth of 165.4% YoY and 2.1% QoQ, which was ahead of our estimate on the back of strong recovery in fee income and opex control even as the management decided to reverse interest income on expected near term slippages from the nonwholesale portfolio. The impact of the interest reversal (on NIM) was ~50bps. NIM for the quarter stood at 4.34%, flat YoY and down 51bps QoQ. The NII quarterly run-rate is expected to revert to >Rs10bn from 4QFY21 onwards. We have adjusted our numbers accordingly. Cost of deposits declined by 29bps QoQ to 5.98%. The management is of the view that they have room to cut deposit rates, which would boost NIM going forward. The current guidance is that NIM should revert to 1QFY21 level by 4QFY21. Another tailwind for the NIM would be the tilt towards retail...
The decline in NIM weighed on NII growth (10% qoq and 7% yoy). There was strongrecoveryincorefeeincome(up52%qoqandstoodat93%ofQ2FY20 level)withrevivedtractionincardfeesandprocessingincome.Treasuryincome waselevated,andstoodsimilartoQ1FY21atRs950mn. Notwithstanding higher business activity levels in nonwholesale products on sequentialbasis,theabsoluteopexcameoffinQ2FY21andexhibitednogrowth onyoybasis.Cost/incomeremainedbelow50%. AdvancesstoodatRs562bn(1%qoqand4%yoy);nonwholesalegrew7%qoq...
RBL Bank Ltd. is a fast-growing private sector bank with a network of 386 branches and over 8.5 million customers. It offers various services, including corporate and institutional banking, commercial banking, retail...
RBL Bank has reported an operational performance which is ahead of our estimates. NII grew by 27.4% YoY and 2% QoQ, driven by healthy NIM of 4.85% (up 54bps YoY, down 8bps QoQ). The loan book growth was flat YoY and down 2.3% QoQ. Amid the lockdown and an uncertain economic situation, the bank continued to maintain a cautious stance on lending. Fee income was affected due to lower credit card fees and lower credit offtake. Total operating income grew by 5.9% YoY but was down 9.7% QoQ. Overall opex was mostly under control, partially due to lower economic activity. Operating profit grew by 11.5% YoY but was down by 9.8% QoQ. Net profit was affected due to high provisions, which were up 134% YoY (down 18.6% QoQ). During...
RBL Bank's (RBK) Q1FY21 PAT at Rs 1.4bn was below our estimate as non-interest income fell 30% YoY due to lower credit offtake, a conservative approach and reduced credit card income.
We maintain our REDUCE rating with a TP of Rs 136, as we believe that RBK faces challenges on both sides of the b/s- potential stress from high unsecured loan exposure and a weak deposit franchise. Key takes from RBKs FY20 AR are as follows: (1) The share of top 20 depositors increased 40bps to 18.8% despite the ~1% (and ~8.1% QoQ in 4QFY20) fall in overall deposits. AR commentary indicates that the bank continues to focus on bulk deposits. (2) The bank appeared to have made some progress on asset-side granularity and this appears to be the focus, which is desirable in context of FY20 asset quality trends. (3) Borrowings from institutions and agencies and the RBI contributed to a majority of incremental borrowings, and overall borrowings grew at ~4x total assets. (4) Segment-wise asset quality data was in line with expectations. These disclosures concur with our stance on the bank.
RBL Bank Ltd. is a fast-growing private sector bank with a network of 386 branches and over 8.5 million customers. It offers various services, including corporate and institutional banking, commercial banking, retail...
Background: RBL bank (RBL) came into operations in 1943 and was incorporated as a small, regional bank in Maharashtra with two branches in Kohlapur and Sangli. Post the change in the management team in 2010, it has been one among the fastest growing private sector banks and now has 386 interconnected branches and 389 interconnected ATMs spread across 24 Indian states and union territories serving ~8.4mn customers. The bank offers a comprehensive range of banking products and services customized to cater to the needs of large corporations, SMEs, agricultural customers, retail customers and development banking & financial inclusion (low income) customers. Loan book of the bank grew at a CAGR of 46% over FY11 to FY20 and stood at...
Despite the sharp correction over a period, we maintain our REDUCE rating (TP of Rs 136, (0.6x Mar-22E ABV)), given elevated risks and sub-par expected return ratios. RBKs 4Q earnings were higher vs. estimates on a/c of sharper than expected margin expansion (not sustainable) and lower than expected LLPs (elevated nevertheless, to persist). B/s growth was constrained as deposits dipped 8% QoQ. RBK faces challenges on both sides of the b/s- potential stress from high unsecured loan exposure and a weak deposit franchise
RBL Bank has reported a better-than-expected result on the operational front, beating our NII and PPOP estimates by 9% and 12%, respectively. The deviation from our estimates was almost entirely on account of an all-time high NIM of 4.93% for the quarter, expanding by 70bps YoY/36bps QoQ. Noninterest income was impacted to the extent of Rs150mn due to the lockdown. Opex grew by 28.7% YoY/11.7% QoQ. Operating profit for the quarter was up 36.6% YoY/4.5% QoQ, driven by 38.2% YoY/10.7% QoQ growth in NII. Loan book growth decelerated to 6.8% YoY, while on a sequential basis, it was down 2.7%. The loan book movement was largely a function of the planned portfolio recalibration (de-bulking of wholesale book). On the liabilities front, deposits have now stabilized post witnessing some decline in Mar'20. LCR remained comfortable, averaging 164% during 4QFY20 and...
7 May 2020 RBK reported weak business trends, weighed by decline in wholesale assets and deposit outflows. Higher provisions impacted earnings, but slippages moderated on a sequential basis, enabling improvement in the coverage ratio. Asset quality is expected to remain under watch as 33% of the loan book availed moratorium, with management guiding for elevated credit costs in credit cards/MFI/MSME portfolio. We cut our PAT estimate for FY21/FY22 by 6%/5%, primarily as we factor in moderation in fee income, led by reduced economic activity / lockdown. 4QFY20 PAT stood at ~INR1.1b (54% YoY decline), affected by higher provisions of INR6.1b. NII grew 38% YoY to INR10.2b, led by 36bp QoQ margin expansion to ~4.9%. Other income increased 22% YoY to INR5.0b, with core fee income growth of 21% YoY, impacted by lockdown. Overall, PPoP growth remains strong at 37% YoY to INR7.6b. In FY20, NII/PPOP rose at 43%/42% YoY, while PAT declined 42% YoY, affected by high provisions.
Asset quality deterioration was on expected lines, and from pre-identified stressed pools. However, we remain cautious on RBK's asset quality for the following reasons (1) 3QFY20 saw a sharp ~Rs 7bn rise in BB and below rated corp loans, (2) Recent asset quality trends reflect poorly on underwriting and risk practices , and (3) Broader economic conditions. While the capital raise is a big positive and will support the bank's growth trajectory, it does not entirely mitigate the above risks. We maintain NEUTRAL. Yet again RBKs PPOP was better than expected, due to sharp NIM improvement and one-off staff cost reversals. PAT was above estimates, even as provisions remained elevated. Slippages remained high, and were mostly from anticipated stress. Maintain NEUTRAL with a TP of Rs 348 (1.5x Dec-21E ABV of Rs 232).
Background: RBL bank (RBL) came into operations in 1943 and was incorporated as a small, regional bank in Maharashtra with two branches in Kohlapur and Sangli. Post the change in the management team in 2010, it has been one among the fastest growing private sector banks and now has 346 interconnected branches and 383 interconnected ATMs spread across 24 Indian states and union territories serving ~7.8mn customers. The bank offers a comprehensive range of banking products and services customized to cater to the needs of large corporations, SMEs, agricultural customers, retail customers and development banking & financial inclusion (low income) customers. Loan book of the bank grew at a CAGR of 52% over FY11 to FY19 and stood at INR 596bn as of 3QFY20...
RBL Bank (RBL) reported 3QFY20 results with the key pointers being: (1) Gross slippages continued to be elevated at Rs10.48bn of which Rs7bn were from the identified corporate stress pool (2) Loan growth slowed to 20% YoY while core fee income growth was better at 37% YoY (3) NIM expansion journey continued with NIM at 4.57%, up 22 bps QoQ and 45 bps YoY (4) Cost to income ratio was lower 351bps YoY and 341bps QoQ at 48.1% on account of cost saving initiatives and one offs (See comprehensive conference call takeaways on page 2 for significant incremental colour). Per se, on the key P&L; items, RBL posted 41% YoY NII growth at Rs9,227mn, PPOP growth of 47% YoY at Rs7,322mn and PAT decline of 69% YoY at Rs700mn. We have revised our estimates for...
22 January 2020 RBK reported moderation in business growth, led by muted wholesale book; deposit growth stood flat sequentially. Slippages remained higher while elevated credit cost impacted earnings. Though operating performance remained strong (fees, NIMs and PPoP), elevated slippages trajectory and higher credit cost is likely to impact earnings in the near term. We cut our EPS estimates for FY20/FY21 by 17%/13%, primarily due to lower business growth and increase in our credit cost estimates given the higher slippages and decline in PCR ratio. NII grew 41% YoY to INR9.2b on 22bp QoQ expansion in margin to 4.6%. Core fee income grew 37% YoY, led by credit card fees, which constituted ~57% of total fees. PPoP growth, thus, remained strong at 47% YoY to INR7.3b. Loan growth moderated to 20% YoY, led by slowdown in the wholesale book, which grew 3% YoY (-4% QoQ) while strong growth in the retail book continued (+49% YoY).
