Shares of RBL Bank hit an all-time low of Rs.92.70 on the BSE in Monday's trade. The stock is down 52.28 per cent in the last six months. RBL stock was trading at Rs. 93.85 per share (down 17.45%) at 12:15 .m., versus a 2.64 per cent fall in the benchmark S&P BSE Sensex.
The stock is trading at a high volume of 60.8 million shares on the NSE and BSE counters until this report is written.
The market capitalisation of RBL Bank stood at ₹6810.48 crore. The stock has a negative PE and a negative EPS.
Shares of RBL Bank slumped to hit an all-time low on Monday after the appointment of veteran banker R Subramaniakumar as its new managing director and chief executive officer. The announcement comes nearly six months after RBL Bank's long-term MD and CEO, Vishwahir Ahuja, had stepped down. The appointment has been made for a period of three years.
Subramaniakumar is a veteran public sector banker with nearly four decades of experience. In the past, he held the positions of managing director and CEO of Indian Overseas Bank.
After the announcement, global broking firm CLSA downgraded the rating for RBL to outperform from Buy with a target price of ₹130 per share (38% upside from CMP).
"Leadership flux and liability are the key headwinds, but the lender has a manageable asset quality." "RBI has approved R Subramaniakumar as the new MD & CEO of the lender, despite the several questions," it added.
According to Kotak Institutional Equities, the appointment of the MD & CEO addressed one concern, but issues regarding the bank's strategy, given its reliance on high-yielding product segments, employee retention, and recovery in return ratios and growth remain unclear.
In the mid-cap banks, there are several banks that are a bit more expensive than RBL, but the recovery from Covid seems to be better and cyclically well-positioned, it added.
RBL Bank's net profit for the January-March period fell short of Street expectations, though net interest margin — a key measure of profitability for lenders — hit an all-time high of 5.04 per cent. Its asset quality also improved.
Net profit per employee has been continuously declining over the last 3 years, with growth of -100.0% last year.
RBL Bank has faced multiple issues in the last couple of years on the growth front, starting from the corporate book blow-up to the recent COVID impact on its microfinance institutions (MFI) and cards business.
Last year, in December, RBL's then MD & CEO, Vishwavir Ahuja, went on indefinite leave. Executive director Rajeev Ahuja was appointed as the interim Managing Director & Chief Executive Officer. Ahuja's departure had come after the RBI appointed one of RBL’s chief general managers, Yogesh Dayal, on the lender’s board as an additional director.
