RBL Bank share price jumps 10% as management says bank is ‘Financially strong’

RBL Bank share price shot up 10 per cent on Wednesday morning after the bank reassured investors and customers that the bank is financially strong, well capitalised and profitable. The stock fell below its listing price of Rs 274 per share on Monday, falling 16 per cent to trade at Rs 199.5 apiece — a 52-week low. “The Bank remains adequately capitalized with a capital adequacy ratio of 16 per cent with Tier-1 at 15 per cent,” the bank said in a press release, adding that the bank is a growing entity with a strong governance set up. The prescribed regulatory requirement for capital adequacy ratio is 11.5 per cent and 9.5 per cent for Tier-1.

Currently trading at Rs 227 per share, RBL Bank share price has tanked 65 per cent in the last one year. In its press release, the bank said, “There has been no material adverse change in the asset quality since we announced our Q3 financial results on January 22, 2020 and our guidance remains consistent.” RBL Bank also said that its Liquidity coverage ratio is at 145 per cent of the statutory requirements as at the end of last week. 

After the Yes Bank fiasco that unfolded last week, Bank stocks in India have taken a beating. IDFC First Bank fell 12 per cent in the last five-days; RBL Bank dropped more than 30 per cent; ICICI Bank was down 11 per cent; Axis Bank slipped 10 per cent and HDFC Bank lost 7 per cent. 

“The management of RBL Bank wishes to address the prevailing concerns around the bank which is based on misinformation, and warrants clarification,” RBL Bank said in the statement. The lender further said, “We wish to re-emphasize that RBL Bank is a fundamentally strong institution. Rumors around financial health and stability of the institution especially in social media seem to be misplaced, motivated and not based on facts”.

RBL Bank, which was formerly known as Ratnakar Bank, saw its net profit fall 69 per cent in the third quarter of this fiscal. Gross non-performing assets were up 3.3 per cent of total loans, up from 1.38 per cent from a year-ago period. RBL Bank  increased its provisions four times to Rs 638 crore owing to NPAs. However, loan growth was strong for the bank. 

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