RBL Bank Ltd. share price forecast

RBL Bank Ltd. is a fast-growing private sector bank with a network of 435 branches and over 9.8 million customers. It offers various services, including corporate and institutional banking, commercial banking, retail...

Uncertainty looms at RBL Bank with the RBI’s appointment of Additional Director on bank’s Board and the Board accepting Mr. Vishwavir Ahuja’s (MD & CEO) leave for six months. More so, after management highlighting that these developments are not in any manner a reflection on business fundamentals or strategy of the Bank.

Shifting stock to 'Under Review'

RBK reported a weak 2QFY22, with a PAT of INR308m, impacted by elevated provisions (INR6.5b) and weak NII trends, as margin contracted sharply by 30bp QoQ to 4.06%. On the business front, loan growth remained muted, affected by a sharp decline in Micro Banking and the Business loans...

RBL Bank Ltd. is a fast-growing private sector bank with a network of 435 branches and over 9.8 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 435 interconnected branches and 380 interconnected ATMs spread across 28 Indian states and union territories serving ~9.8mn 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...

crystallizing into NPLs in coming quarters. However, the provisioning expense of 14.3bn (7.7bn in 4QFY21) has translated into substantial improvement in PCR to 76.3%. Moreover, the covid provisioning (6.5bn) stood 114bps of net advances. The Bank witnessed 19bps improvement in NIMs to 4.36% because of healthy YoA (11.6% v/s 11.2% sequentially) and reduction in CoF (5.27% v/s 5.45% sequentially). As expected, the bank reported a credit de-growth of 3.6 % sequentially. We estimate the growth to remain tepid for FY22E but adequate provision is likely to give comfort to the balance sheet. Factoring the in-expensive valuation (0.9x PBV) and a stable...

Accelerated provisioning leads to loss

RBL Bank (RBK) reported a weak quarter, with net loss of INR4.6b, impacted by elevated provisions (INR14.3b) as the bank upfronted the impact of the second COVID wave and shored up its PCR to ~61%. Business growth remains muted, impacted by a weak business environment. On the other hand, margins are seeing a sequential uptick, aided by lower cost of funds, some excess liquidity deployment, and lower interest reversals v/s 4QFY21. The bank has suggested a change in business strategy, with an increasing focus on home loans and expansion in the Credit Cards business. On the...

RBL Bank is re-accelerating its growth phase with consistent asset quality by de-risking the credit card business (20.8% of loan book) and better quality corporate book (41.3% of book). The bank's the GNPA ratio to narrow down to 3.1% in FY23E. The wholesale book clean -up is behind us; the BB & below book (4.9%) is likely to squeeze further. We estimate ROA/ROE of 1%/8% in FY23E...

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 429 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: RBL Bank's (RBK) 4QFY21 pre-provisioning profit (15% YoY) was higher than our expectations on account of higher income from recoveries, partially offset by softening NIMs (4.17%). Asset mobilisation remained muted (1% YoY), while deposits mobilisation (27% YoY) has gained traction. Asset quality woes continue for RBL Bank with slippages at ~10% (annualised), similar to Q3 levels (on pro-forma basis), and restructured pool at 1.7% of loans. With PCR at 52% and provisioning buffer nearly entirely drawn down, along with the second wave of pandemic, credit costs are likely to remain elevated for FY22 as well. Maintain REDUCE with revised TP of INR189. Godrej Properties: Godrej Properties (GPL) reported an operationally robust 4QFY21 with pre-sales volume of 4.2msf (16%/74% YoY/QoQ) and value of INR 26.3bn (10%/77% YoY/QoQ), on the back of seven new launches, which contributed INR 15bn of pre-sales during the quarter. With that, GPLs pre-sales value/volume growth stood at 14%/23% in a challenging FY21. Collections were also robust at INR 20bn during the quarter. Despite the second wave, we expect GPL to register growth in FY22, given (1) healthy balance sheet (-0.07x net D/E), which is further strengthened by the recent QIP, (2) robust launch pipeline (12.3 msf), and (3) strong brand recognition. However, we reiterate REDUCE, as all the positives are fairly priced in. We change our FY22/FY23 estimates by 41/11% and target price to INR 1,323/sh (earlier INR 1,353/sh) to account for the QIP.

Heading in the right direction upgrade to ADD

the previous quarter. The up-gradation & recoveries stood 7.8bn against 0.8bn in 3QFY21. Reported GNPA/NNPA/PCR: 4.34%/2.12%/72.2% against 1.84%/0.71%/86.4% in the previous quarter. The bank's NPA ratios down from Pro-forma GNPA/NNPA of 4.57%/2.37% in the prior quarter. The restructured asset grew 51bps to 1.41% of loan book. The BB + and below book stood at 5.7% of the total book. The BB & below pool (calculated) stood at ~4.9% of the net advances. Moreover, the A- and above book stood 77.6%. In 4QFY21, the bank's provisioning expenses increased 25.7% sequentially to 7.6bn v/s 6.1bn in the previous quarter. The total...

RBL Bank's (RBK) Q4FY21 PAT of Rs 0.8bn declined 34% YoY due to an 11% fall in NII and accelerated provisions.

Continues to strengthen Balance Sheet

Stress created due to the Coronavirus pandemic seems to have eased for the banking sector.

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 Ltd. is a fast-growing private sector bank with a network of 403 branches and over 9 million customers. It offers various services, including corporate and institutional banking, commercial banking, retail banking,...