With base effect catching up, RBL is a capital guzzler among private banks

With the bank growing its assets by over 30-35% quarter after quarter, it is constantly in need of capital

Hamsini Karthik

With gains of 13 per cent in 2018, the base effect is perhaps catching up with RBL Bank. Compared to a year-ago performance of 52 per cent gains on the bourses, the stock’s popularity is cooling off a bit.
One of the reasons which could prompt investors to stay on the sidelines is RBL’s pace of capital consumption. Despite the mega fundraising of Rs 1,680 crore in 2017, which took the capital adequacy to 17 per cent, the pace at which the company consumes capital has resulted in its tier 1 capital touching the 12.5-per cent mark in July-September quarter (Q2). With this, it is perhaps the lowest (on this metric) among top private banks, though better than the statutory requirement.

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First Published: Dec 31 2018 | 8:28 PM IST

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