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    Why RBL Bank plunged over 13% despite posting 41% rise in Q1 profit

    Synopsis

    Provisions and contingencies jumped 51.89 per cent YoY to Rs 213.18 crore in Q1.

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    The bank’s capital adequacy ratio as of June 30 was 12.07 per cent, significantly higher than the regulatory requirements.

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    NEW DELHI: Shares of RBL Bank plunged over 13 per cent after the company said that it expects some challenges on some of their exposures in the near term.

    The fall came despite the lender reported 41 per cent year-on-year (YoY) rise in profit at Rs 267.10 crore for the quarter ended June 30 against Rs 190 crore in the same period last year. Net interest income, other income and operating profit of the lender jumped 48 per cent, 48 per cent and 43 per cent, respectively, during the quarter under review.

    Provisions and contingencies jumped 51.89 per cent YoY to Rs 213.18 crore in Q1FY20 over Rs 140.35 crore in Q1FY19.

    Commenting on the quarterly performance, Vishwavir Ahuja, MD & CEO, RBL Bank said: “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. At the same time, given the strong momentum in our businesses, we do expect to maintain healthy profitable growth over the coming quarters.”

    According to RBL Bank, possible slippages in corporate accounts may spike credit cost by 35-40 basis points. The bank is cautious on some corporate accounts slipping into the NPA category in the next nine months.

    “Possible slippages may elevate the NPA levels,” Ahuja told ET NOW.

    The bank’s capital adequacy ratio as of June 30 was 12.07 per cent, significantly higher than the regulatory requirements.

    Asset quality of the lender stood stable with percentage of gross non-performing assets (NPA) coming in at 1.38 per cent for the June quarter.

    Net interest margin increased marginally to 4.31 per cent in Q1FY20 from 4.04 per cent in the same period last year. Cost to income increased to 52.35 per cent from 50.80 per cent during the same period.

    The shares of the bank closed 13.71 per cent lower at Rs 500.35 on BSE.
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    6 Comments on this Story

    rhp391 days ago
    Till MD of RBL tells the investors yesterday, on corporate debt worries, no brokerage and also this magazine did not utter a single word about this failure. Is this the wisdom they have or hand in gloves? Now RBL shares may plummet more on Monday also.
    Bl Paneri391 days ago
    80 crore jump in provision and 80 crore jump in income side, a magical matching.
    Vishal Bhosekar391 days ago
    Banker MD Ahuja sir Shorted his own bank and big players might have offloaded his position, sensing rise in npa in coming quarter as guided in result.
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