RBL Bank shares are in focus after Bank of America maintained an ‘Underperform’ rating on the stock, with a target price of Rs 175 per share.
BofA noted that the bank delivered a soft fourth quarter, impacted by elevated credit costs, although this was partially offset by stable net interest margins (NIMs) and effective cost control. Loan growth was modest, with a decline observed in the unsecured lending segment.
The brokerage highlighted that the bank has accelerated provisioning in its microfinance (MFI) portfolio, now achieving 100% gross non-performing asset (GNPA) coverage and 75% MFI coverage. It also observed that slippages appear to have peaked.
RBL Bank reported its Q4 results:
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Net profit declined 80.5% year-on-year to Rs 68.7 crore compared to Rs 352.6 crore a year ago.
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Net interest income (NII) decreased 2.3% year-on-year to Rs 1,563 crore compared to Rs 1,599.9 crore last year.
At the current market price of Rs 188.09 per share, BofA Securities’ target price of Rs 175 implies a downside of about 7%.
Disclaimer: This article is for informational purposes only. Investors are advised to consult certified financial advisors before making any investment decisions.
