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RBL Bank share rises 15% after lender rejects rumours over financial health

BusinessToday.In     March 11, 2020

RBL Bank share price rose in early trade today after the lender said it was a financially strong, well capitalised and profitable entity.  Share price of RBL Bank gained up to 15% to Rs 238.95 compared to the previous close of Rs 207.80  on BSE.

RBL Bank stock was trading lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The mid cap stock has lost 64.25% in last one year and fallen 33.38% since the beginning of this year.  In last one month, the stock has lost 32.48%.

On March 9, the stock hit its 52-week low of Rs 199 on BSE.

Rejecting rumours around financial health and stability of the lender on social media, the lender said, "The bank remains adequately capitalized with a capital adequacy ratio of 16.08% with Tier-1 at 15.02% (significantly higher than the prescribed regulatory requirement at 11.5% and 9.5% respectively).

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. Our Liquidity Coverage Ratio (LCR) is at 145% of statutory requirements as at the end of last week,  " the lender said in a communication to bourses.

The bank reported weak earnings in the third quarter of current fiscal. It reported a 69 per cent fall in net profit at Rs 69.9 crore for the quarter ended December 31, 2019 on account of rise in bad loans.

The private sector lender had registered a net profit of Rs 225.20 crore in October-December period of the previous fiscal. However, total income increased to Rs 2,64,430 crore as against Rs 1,029.20 crore for the same period year ago, the bank said.

Asset quality of the bank deteriorated with gross non-performing assets (NPAs) rising to 3.33 per cent of gross advances as on December 31, 2019 from 1.38 per cent in the year-ago period.

Net NPAs also rose to 2.07 per cent of net loans from 0.72 per cent in the corresponding quarter of 2018-19, the bank said.

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