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Why RBL Bank shares fell 19% in two sessions

RBL Bank share price has fallen nearly 19 per cent in the last two trading days after the bank announced the first quarter earnings report on July 19

twitter-logo BusinessToday.In   New Delhi     Last Updated: July 22, 2019  | 16:13 IST
Why RBL Bank shares fell 19% in two sessions
RBL Bank share price declined as much as 6.21 per cent to touch an intra-day low of Rs 469.25 apiece on the BSE

Shares of RBL Bank continued losing streak for the second consecutive session on Monday, falling over 6 per cent in intra-day trade, after the private sector lender's MD & CEO, Vishwavir Ahuja, raised concerns over some of the bank's exposures in the near future.

"Given the difficult environment we do expect to face some challenges on some of our exposures in the near term. At the same time, given the strong momentum in our businesses, we do expect to maintain a healthy profitable growth over the coming quarters," Vishwavir Ahuja had said while commenting on the performance of June quarter results.

The stock has fallen nearly 19 per cent in the last two trading days after the bank announced the first quarter earnings report on July 19. On Friday, the RBL Bank share price posted its highest single-day decline of 14 per cent since listing on the bourses on August 31, 2018.

Extending previous session losses, share price of RBL Bank declined as much as 6.21 per cent to touch an intra-day low of Rs 469.25 apiece on the Bombay Stock Exchange (BSE) after making a bearish start at Rs 495.10. By the time of reporting, the scrip was trading at Rs 483.15, down 3.47 per cent.

The stock witnessed a huge surge in volume trade as 5.45 lakh shares changed hands over the counter as compared to their 2-week average trade volume of 3.45 lakh shares on the BSE.

Also Read: HDFC Bank down 3% despite bullish calls by brokerages post result

On the National Stock Exchange, RBL Bank share was trading at Rs 483.75 apiece, down 3.33 per cent as compared to previous closing price of Rs 500.40. The stock opened lower at Rs 495 and touched an intra-day low of Rs 469.05 during the day's trade.

The bank had reported a 41 per cent growth in net profit at Rs 267.1 crore for the first quarter ended June 30, 2019, as against Rs 190.04 crore in the same quarter last year.

RBL Bank's net interest income (NII), which is the difference between interest earned on loans and that paid on deposits, grew 47.88 per cent to Rs 817.32 crore in April-June quarter of FY20, compared to Rs 552.7 crore in the corresponding quarter.

RBL Bank's asset quality improved during June quarter, with gross non-performing assets (NPAs) ratio - bad loans as a percentage of gross advances - falling to 1.38 per cent versus 1.40 per cent in the year-ago quarter. Net NPA declined to 0.65 per cent during June quarter as compared to 0.75 per cent in the corresponding quarter last year.

However, the provisions and contingencies of the bank increased to Rs 213.18 crore from Rs 140.35 crore in the year-ago period.

Edited by Chitranjan Kumar

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