Shares of RBL Bank fell by 2.10% to ₹168.90 on Tuesday after the bank reduced its loan growth expectations to low double digits, as highlighted during its Citi meet. The bank’s earlier projection stood at 15% year-on-year growth in Q2FY25.
Key Updates from Citi on RBL Bank:
- Microfinance Stress: MFI’s SMA-0/1/2 pool stood at 3.12%/2.45%/1.48%, signaling spillover in slippages and credit costs into Q3 and possibly Q4.
- Credit Card Slippages: Although slight month-on-month improvement was observed since September, stress in the segment remains elevated.
- NIM Pressure: Net Interest Margins (NIMs) are expected to contract further in Q3FY25.
- Focus on Capital and RoA: With constrained capital and elevated stress in unsecured loans, the bank now prioritizes Return on Assets (RoA) over aggressive growth, leading to its modest loan growth revision.
Citi Recommendation:
- Rating: BUY
- Target Price: ₹255
The revised estimates reflect cautious investor sentiment, pressuring the stock in early trading hours.
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RBL Bank