RBL Bank’s share price jumped in early morning trades today after the bank published a clarity regarding the asset quality challenges it is facing after it met the lower circle twice on Monday.
The private lender explained yesterday’s rumour that RBL Bank is experiencing asset quality issues, calling it “unsubstantiated and unfounded, simply speculative in nature.”
“There has been substantial conjecture and rumours linking the hiring of the bank’s incoming President and CEO, Mr RS Kumar, with assets quality issues for the bank shortly,” RBL Bank said in a news release. We would like to emphasise that such supposition is unfounded and simply speculative.’
RBL Bank’s gross and net NPA for the year ended March 31, 2022, were 4.4 per cent and 1.3 per cent, respectively, with a revenue coverage ratio of 70.4 per cent and no reportable variation. As the bank has stated in earlier statements, it is well-equipped and does not foresee any asset quality concerns.
As previously stated, credit costs for FY 23 are likely to be much lower than FY22 due to excellent sales coverage, fewer crime patterns, and improved recovery visibility from the GNPA book.
RBL Bank is also well-capitalized, with a capital adequacy ratio of roughly 17.8 per cent following its most recent Tier 2 capital raise on May 13, 2022, from the United States Global Development Finance Corporation, a US development finance institution.
The RBL share price climbed at the outset today, reaching an intraday high of 91.20 pieces on the NSE, up more than 2% from yesterday’s closing levels of 87.85. On Monday, the private lender hit a new 52-week low of 86.35 on the NSE. RBL Bank’s stock closed at 114.25 on Friday, according to the NSE.
The RBL Bank’s gross and net NPAs for the year ended March 31, 2022, were 4.4 per cent and 1.3 per cent, respectively, with an interest cover ratio of 70.4 per cent and no reportable divergence. As the Bank has stated in previous commentaries, it is well-equipped and does not anticipate any asset quality issues.
As previously mentioned, credit costs for FY 23 are likely to be considerably lower than FY22 due to good provision coverage, improved default trends, and strong recovery visibility from the GNPA book.
The RBL Bank is also well capitalised, with a capital adequacy ratio of approximately 17.8% following its recent Tier 2 capital raise on May 13, 2022, from the United States International Development Finance Corporation, America’s development finance institution.
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