RBL Bank Ltd. share price target

Continues to strengthen Balance Sheet

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

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

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,...

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's 3QFY21 results indicated a steady normalization in credit cost. As the moratorium lifted, the collection in credit card segment (contributes 18.2%) almost reached the pre-Covid level. The restructured assets (0.9%) and BB and below pool (6% of advances) have high likelihood of crystallizing into NPLs after asset classification resumes. However, the provisioning expense of 6.1bn (5.3bn in 2QFY21) has translated into substantial improvement in PCR to 86.4%. Moreover, the Covid provisioning (6.64bn) stood 121bps of net advances. The bank witnessed 15bps decline in NIMs to 4.19% because of proactive reversal of interest income on pro-forma NPA. As expected the bank reported a muted credit growth of 0.5% sequentially. We estimate the growth to remain...

RBL Bank's (RBK) PAT was largely in line at Rs 1.5bn.

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...