RBL Bank: Regaining investor confidence an uphill task post Q3 results

Analysts have slashed their earnings expectation by 12 - 15 per cent for the lender

RBL Bank posted its weakest-ever asset quality in the December quarter (Q3), prompting analysts to downgrade their earnings expectations by 10-15 per cent. 

This, however, does not seemed to have soured the Street’s mood, which remained optimistic on Thursday. 

According to the management, Rs 1,500 crore of the identified pool of stressed assets (of Rs 1,800 crore) went bad, for which the bank had taken 40-50 per cent provisioning. 

Slippages at Rs 1,048 crore in Q3 (4x increase year-on-year) and a Rs 700-crore rise in loans in the below-investment grade (BB and below rated) book surprised many. 

Analysts at Kotak