RBL Bank rises and fizzles

RBL Bank had a quick run and now its almost like its retreating to where it began as the rally fizzles out. The stock, which had closed yesterday at Rs.128.90, opened higher at its intraday high at Rs.134 and from there is has been coming down gradually and is now at Rs.129 levels, just about holding to the green.

The higher provisions halved the Bank’s net profit for Q4FY20 from Rs.247 crore to Rs.114 crore, a YoY fall of 54%.

The bank set aside Rs 614 crore in provisions v/s Rs.2000 crore (YoY) but sequentially, it was lower from Rs.639 crore. Provisioning coverage ratio rose to 64% v/s 58% (QoQ) which resulted in Rs 190 crore of provisions and made total provisions of Rs 115 crore compared to the Rs 7 crore mandated by RBI to deal with Covid.

In terms of asset quality, Gross NPA rose to 3.62% v/s 3.3% (QoQ) and Net NPA was marginally down to 2.06% v/s 2.07%. Slippages during the quarter stood at Rs.700 crore v/s Rs.1,050 crore (QoQ).