MOSL: RBL BANK (Under Review)-Strong growth continues-Capital consumption faster than expected
​RBL Bank: Strong growth continues; Capital consumption faster than expected
(RBL IN, Mkt Cap USD3.4b, CMP INR585, Under Review)
- 4QFY17 PAT rose 55% YoY (10% miss). Despite PPoP beat of 8% (+75%/20% YoY/QoQ), the spike in provisioning led to PAT exceeding estimate. Key positives: a) Loan growth of 10% QoQ and 39% YoY. b) Fee income growth of 45% YoY and 33% QoQ. c) NIM improvement of 10bp QoQ to 3.5%.
- Absolute GNPAs rose 24% QoQ (+72% YoY) to 1.2% of loans. Led by the RBI's directive, five accounts slipped into NPA, of which four were closed and recovered completely in FY17 itself. The remaining one account (EPC sector) amounted to INR660m (22bp impact on GNPA), 50% of which has been provided for in Q4. Adjusted for this, GNPAs would have been at 0.98% (stable YoY).
- FY17 highlights: a) Loan growth was broad-based, with wholesale and non-wholesale growth of 39% YoY each. b) Strong CASA growth of 68%; CASA ratio improved 340bp YoY to 22%. c) Fees to assets improved 15bp to 1.45% d) Decline in C/I ratio by 550bp to 53.5%, despite branch addition of 21% YoY. e) High share of off-balance sheet growth, leading to a rise in RWA to TA to 76% v/s 68% a year ago.
RBL Bank Limited is a banking company. The Bank is engaged in providing a range of banking and financial services, including commercial banking, retail banking, agriculture finance and financial inclusion, treasury operations and other banking related activities. The Bank's segments include Corporate/Wholesale Banking, which includes lending, deposits and other banking services provided to corporate customers of the Bank; Retail Banking, which includes lending, deposits and other banking services provided to retail customers of the Bank through branch network or other approved delivery channels; Treasury, which includes investments, all financial markets activities undertaken on behalf of the Bank's customers, trading, maintenance of reserve requirements and resource mobilization from other Banks and financial Institutions, and Other Banking Operations segment, which includes para banking activities, such as Bancassurance and credit cards.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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