InvestorQ : Why has the shares of RBL Bank fallen so sharply on 29 October?
Archita Jajjoo made post

Why has the shares of RBL Bank fallen so sharply on 29 October?

Niti Shenoi answered.
12 months ago

On Friday ,the stock of RBL Bank fell sharply by nearly 15% to Rs.172 after the bank reported disappointing numbers. For the Sep-21 quarter, the PAT was down 95% at Rs.31 crore due to a combination of higher provisions and weak net interest income. The bank had posted a steep loss of Rs.459 in the first quarter ended June 2021. This steep fall in the bank stocks has meant that it has corrected nearly 37% from its recent peak.

In the Sep-21 quarter, the net interest income or NII contracted by 2% to Rs.915 crore. The net interest margins or NIMs also came down from 4.36% to 4.06% on a sequential basis. The micro banking portfolio of RBL Bank came under a lot of pressure despite the corporate banking portfolio picking up sharply in the quarter. This led to a sharp dent on the profitability of the company.

The bigger hit was on the asset quality front. Gross NPAs spiked by 41 bps to 5.14% while the net NPAs also ended up higher. The gross NPAs are up by nearly 200 bps on a yoy basis showing intense pressure on account of COVID related asset quality pressures.