Q3FY2019 Result Update | Banking
Feb 07, 2019
RBL Bank
BUY
CMP
`585
Performance Highlights
Target Price
`690
Particulars (` cr)
Q 3FY19
Q 2FY19
% chg (qoq)
Q 3FY18
% chg (yoy)
Investment Period
12 Months
NII
655
593
10%
467
40%
Pre-prov. profit
498
449
11%
333
49%
Stock Info
PAT
225
205
10%
165
36%
Source: Company, Angel Research
Sector
Banking
RBL bank delivered healthy set of numbers for Q3FY19, with PAT growth of 36%
Market Cap (` cr)
24,828
yoy. On the operating front, the bank reported 40% yoy growth in NII. The NIM
Beta
1.3
qoq/yoy increased by 4/23 bps, respectively, driven by rise in advance yield. The
52 Week High / Low
652/439
bank managed to reduce its expenses and brought down the cost/income ratio
Avg. Daily Volume
68,579
from 54% in Q3FY18 to 51.6% in Q3FY19.
Face Value (`)
10
BSE Sensex
36,975
Robust advance growth; NIM Improved
Nifty
11,062
Reuters Code
RATB.NS
During Q3FY19, the bank’s advances grew by 35.2% yoy, of which retail loan
Bloomberg Code
RBK:IN
book increased 49% yoy to constitute 29% of the total advances. The corporate
loans inched up by 27% yoy. The net interest income during this period grew by
40% which is higher than advance growth. During the quarter NIM increased by
4bps QoQ and 23bps YoY to 4.12%, helped by rise in yield on advances (up 102
Shareholding Pattern (%)
BPS yoy) as against cost of funds (up 55 BPS yoy). Rise in yield was on account of
Promoters
7.8
increasing MCLR rates as well as increasing proportion of high-yielding non
MF / Banks / Indian Fls
20.7
wholesale book. Moreover, a slower rise in Opex aided lower cost/income by
248bps yoy to 51.6% in Q3FY19.
FII / NRIs / OCBs
39.8
Indian Public / Others
31.7
Total deposits surged by 35% yoy and 9.2% qoq in Q3FY19. CASA deposits
accounted for 24.6% of the total deposits.
On asset quality front, the bank continued to maintain strong asset quality with a
GNPA/NPA ratio of 1.38%/0.72% of loans. Total slippages for the quarter were at
Abs. (%)
3m
1yr
3yr
`211cr, which is 48% higher on qoq basis. Fresh slippages from agri loan book.
Sensex
4.9
8.5
52.2
Outlook & Valuation: We expect RBL Bank to grow its advances at CAGR of 35%
RBL Bank
7.9
21.7
80.3
over FY2018-20E. Improvement in CASA, higher share of retail book and in-
house priority sector lending would support NIM going forward. At CMP, RBL
trades at 3x FY20E P/ABV, which we believe is attractive considering growth
3-year price chart
prospects, hence, we recommend BUY with a target price of `690 over the next 12
700
months.
600
500
400
Key financials (Standalone)
300
Y/E March (` cr)
FY16
FY17
FY18
FY19E
FY20E
200
NII
819
1,221
1,766
2,463
3,347
100
% chg
42
42
27
33
34
Net profit
292
446
635
882
1,279
% chg
41.2
52.5
42.3
38.9
45.0
NIM (%)
2.6
2.9
3.4
3.6
3.7
Source: Company, Angel Research
EPS ( Rs)
7.0
10.6
15.1
21.0
30.5
P/E (x)
84
55
39
28
19
Jaikishan Parmar
P/ABV (x)
8.4
5.8
3.7
3.4
3.0
RoA (%)
0.9
1.0
1.1
1.2
1.4
Research Analyst
R oE (%)
11.2
12.2
11.5
12.5
16.0
022 - 39357600 Ext: 6810
Source: Company, Angel Research, Note: CMP as of 06/02/19
[email protected]
Please refer to important disclosures at the end of this report
1
RBL Bank | Q3FY2019 Result Update
Exhibit 1: Quarter Summary
Particular (` cr)
Q 1FY18
Q 2FY18
Q 3FY18
Q 4FY18
Q 1FY19
Q 2FY19
Q 3FY19
YoY
QoQ
Interest Income
1,043
1,091
1,151
1,223
1,364
1,463
1,639
42.4
12.0
Interest Expenses
664
671
684
722
812
870
984
43.9
13.0
Net Interest Income (NII)
378
420
467
500
553
593
655
40.2
10.5
Other Income
257
241
258
312
326
333
374
44.9
12.3
Total Income
1,300
1,332
1,409
1,535
1,690
1,797
2,013
42.9
12.0
Net Income
635
661
726
812
879
926
1,029
41.9
11.1
Operating Expense s
324
358
392
429
446
477
531
35.3
11.2
Employee Expe nse s
133
144
144
131
153
150
164
14.2
8.7
Other Operating Expenses
191
215
248
299
293
326
366
47.6
12.4
Cost / Income %
51.0%
54.2%
54.0%
52.8%
50.8%
51.5%
51.6%
-247.8
5.4
Operating Profit
311
303
333
383
432
449
498
49.5
11.0
Provisions
94
75
82
113
140
139
160
95.2
15.0
PBT
217
228
251
270
292
309
338
34.5
9.2
Provisions for Tax
76
78
86
92
102
104
112
31.3
7.4
Tax Rate %
35.0%
34.0%
34.2%
34.1%
34.9%
33.9%
33.3%
PAT
141
151
165
178
190
205
225
36.2
10.1
Balance Sheet
Advances
31,108
33,576
36,890
40,268
42,198
45,873
49,893
35.2
8.8
Deposits
35,428
36,569
38,623
43,902
44,950
47,790
52,187
35.1
9.2
Savings
4,641
5,449
5,214
5,356
5,799
6,022
6,523.4
25.1
8.3
Current
3188.52
3,218
4,055
5,356
5,214
5,687
6,314.6
55.7
11.0
CASA
7,830
8,667
9,270
10,712
11,013
11,709
12,838
38.5
9.6
CASA%
22.1%
23.7%
24.0%
24.4%
24.5%
24.50%
24.60%
0.6
0.1
Profitability
Change
bps
Yield on Advance
10.18
10.13
10.09
9.88
10.45
10.66
11.11
102.8
45.5
Yield on Inve stment
7.46
7.59
7.45
7.00
7.03
7.47
7.67
22.3
19.8
Yield on Call Money
8.03
5.56
4.85
4.44
4.60
6.01
6.34
149.3
33.1
Cost of Fund
6.24
6.20
6.02
5.77
6.09
6.28
6.57
55.0
28.9
NIM
3.20
3.44
3.60
3.53
3.67
3.80
3.90
30.4
11.0
Spread
3.95
3.93
4.07
4.10
4.37
4.38
4.55
47.7
16.7
NIM - Reported
3.54
3.74
3.89
3.98
4.04
4.08
4.12
23.0
4.0
ROE
12.8
11.2
10.4
10.8
11.2
11.7
12.6
222.7
83.7
ROA
1.16
1.19
1.23
1.22
1.22
1.26
1.29
6.2
3.1
C apital Adequacy
Change
bps
Tier 1
11.10
14.50
14.10
13.60
13.10
12.50
12.50
-160.0
0.0
Tier 2
2.30
2.10
1.80
1.70
1.50
1.20
1.30
-50.0
10.0
Total
13.40
16.60
15.90
15.30
14.60
13.70
13.80
-210.0
10.0
A sset Q uality
Change
bps
GNPA (%)
1.50
1.40
1.60
1.40
1.40
1.42
1.38
-22.0
-4.0
NPA (%)
0.80
0.80
1.00
0.80
0.70
0.74
0.72
-28.0
-2.0
Restructured Asset (%)
0.24
0.41
0.18
0.08
0.10
0.07
0.09
-9.0
2.0
PCR Calculate d (%)
47
43
38
43
50
48
48
1032.6
-6.1
PCR Reported (%)
58
58
53
58
60
62
63
1030.0
180.0
GNPA (` in Cr)
458
487
580
567
596
645
696
19.9
7.8
NPA (` in Cr)
250
261
358
313
316
339
358
0.1
5.8
Slippages (` in Cr)
152
92
210
115
148
142
211
0.5
48.6
Credit Cost (%)
0.49
0.27
0.57
0.29
0.35
0.31
0.42
-14.6
11.3
Source: Company, Angel Broking
Feb 07, 2019
2
RBL Bank | Q3FY2019 Result Update
Exhibit 2: Advance Trend and MIX
Particular (` cr)
Q 1FY18
Q 2FY18
Q 3FY18
Q 4FY18
Q 1FY19
Q 2FY19
Q 3FY19
YoY
QoQ
C&IB
13,079
13,895
15,606
16,240
17,149
18,826
19935
27.7
5.9
CB
6,014
6,528
6,707
7,512
7,837
8,303
8,541
27.3
2.9
Wholesale
19,093
20,423
22,313
23,752
24,986
27,129
28,476
27.6
5.0
Retail Asset
7,820
8,539
9,796
10,831
11,361
12,407
14,644
49.5
18.0
DB&FI
4,196
4,614
4,781
5,684
5,851
6,337
6,773
41.7
6.9
-Micro banking
2,234
2,533
2,886
3,560
3,698
3,917
4,220
46.2
7.7
-IFI
1,577
1,616
1,358
1,543
1,503
1,669
1,685
24.1
1.0
-MSME
385
465
536
581
649
751
868
61.9
15.6
Non-Wholesale
12,016
13,153
14,577
16,515
17,212
18,744
21,417
46.9
14.3
Total
31,109
33,576
34,913
40,267
42,198
45,873
49,893
42.9
8.8
A dvance MIX (%)
Change
bps
C&IB
42
41
45
40
41
41
40
-474.4
-108.4
CB
19
19
19
19
19
18
17
-209.2
-98.1
Wholesale
61
61
64
59
59
59
57
-683.6
-206.5
Retail Asset
25
25
22
27
27
27
29
695.5
230.4
DB&FI
13
14
14
14
14
14
14
-11.9
-23.9
-Micro banking
7
8
8
9
9
9
8
19.2
-8.1
-IFI
5
5
4
4
4
4
3
-51.2
-26.1
-MSME
1
1
2
1
2
2
2
20.4
10.3
Non-Wholesale
39
39
36
41
41
41
43
683.6
206.5
Total
100
100
100
100
100
100
100
Source: Company, Angel Broking
Exhibit 3: Core fee growing at healthy rate supported by credit card fees
Other income Analysis
Q 1FY18
Q 2FY18
Q 3FY18
Q 4FY18
Q 1FY19
Q 2FY19
Q 3FY19
YoY
QoQ
Other Income
257
241
258
312
326
333
374
44.9
12.3
Trading
75
39
28
41
36
7
26
-7.8
293.0
Core Fees
182
202
230
271
290
326
348
51.4
6.6
FX
35
34
34
38
35
39
38
11.0
-2.3
Proc Fees
57
57
67
65
70
75
80
20.1
6.6
gen banking
27
30
28
38
35
46
49
76.6
6.6
Distribution
5
6
9
16
12
10
10
13.5
6.6
CC
42
55
71
90
116
131
143
100.2
9.2
Trades & other
16
20
21
27
23
29
28
34.6
-5.3
Total Core Fee s
182
202
230
274
290
330
348
51.4
5.5
Source: Company, Angel Broking
Feb 07, 2019
3
RBL Bank | Q3FY2019 Result Update
Income Statement
Y/E March (` cr)
FY16
FY17
FY18
FY19E
FY20E
Net Interest Income
819
1,221
1,766
2,463
3,347
- YoY Growth (%)
47
49
45
39
36
Other Income
491
755
1,068
1,419
1,852
- YoY Growth (%)
22
54
41
33
31
Operating Income
1,310
1,977
2,834
3,882
5,200
- YoY Growth (%)
36
51
43
37
34
Operating Expenses
767
1,056
1,504
1,975
2,601
- YoY Growth (%)
28
38
42
31
32
Pre - Provision Profit
542
920
1,331
1,907
2,598
- YoY Growth (%)
51
70
45
43
36
Prov. & Cont.
114
239
365
571
660
- YoY Growth (%)
90
109
53
57
16
Profit Before Tax
428
681
966
1,336
1,938
- YoY Growth (%)
43
59
42
38
45
Prov. for Taxation
136
235
331
454
659
- as a % of PBT
32
35
34
34
34
PAT
292
446
635
882
1,279
- YoY Growth (%)
41
53
42
39
45
Balance Sheet
Y/E March (` cr)
FY16
FY17
FY18
FY19E
FY20E
Equity
325
375
420
420
420
Reserve & Surplus
2,665
3,960
6,264
7,014
8,101
Networth
2,989
4,336
6,684
7,433
8,521
De posits
24,349
34,588
43,902
58,325
78,303
- Growth (%)
42
42
27
33
34
Borrowings
10,536
7,980
9,261
12,410
16,630
Other Liab. & Prov.
1,330
1,785
2,003
3,878
3,809
Total Liabilities
39,204
48,689
61,851
82,047
1,07,263
Cash Balance s
1,340
2,948
2,589
3,578
4,782
Bank Balances
1,110
1,246
1,695
2,045
2,733
Investments
14,436
13,482
15,448
19,934
23,910
A dvances
21,229
29,449
40,268
54,362
73,388
- Growth (%)
47
39
37
35
35
Fixed Assets
177
259
334
460
615
Other Assets
912
1,306
1,517
1,669
1,836
Total Assets
39,204
48,689
61,851
82,047
1,07,263
Feb 07, 2019
4
RBL Bank | Q3FY2019 Result Update
Exhibit 4: Key Ratio
Y/E March
F Y16
F Y17
F Y18
F Y19E
F Y20E
Profitability ratios (%)
NIMs
2.6
2.9
3.4
3.6
3.7
Cost to Income Ratio
58.6
53.4
53.0
50.9
50.0
RoA
0.9
1.0
1.1
1.2
1.4
RoE
11.2
12.2
11.5
12.5
16.0
B/S ratios (%)
CASA Rati o
0.19
0.22
0.24
0.25
0.26
Credit/Deposit Rati o
0.9
0.9
0.9
0.9
0.9
Asset Quality (%)
Gross NPAs
0.98
1.21
1.41
1.33
1.25
Gross NPAs (` in Cr)
208.1
356.8
566.7
723.0
917.4
Net NPAs
0.59
0.64
0.78
0.73
0.73
Net NPAs (` in Cr)
124.4
189.9
314.0
396.8
535.7
Credit Cost on Advance
0.54
0.81
0.91
1.05
0.90
Provision Coverage
60%
53%
55%
55%
58%
Per Share Data (`)
EPS
7.0
10.6
15.1
21.0
30.5
BV
71.2
103.3
159.3
177.1
203.0
ABVPS (75% cover.)
69.8
101.3
155.8
172.8
196.8
DPS
1.5
1.8
2.3
3.2
4.6
Valuation Ratios
PER (x)
83.8
54.9
38.6
27.8
19.2
P/BV
8.2
5.7
3.7
3.3
2.9
P/ABVPS (x)
8.4
5.8
3.7
3.4
3.0
Dividend Yield
0.3
0.3
0.4
0.5
0.8
Source: Note - Valuation done closing price of 07/02/19
Feb 07, 2019
5
RBL Bank | Q3FY2019 Result Update
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
DISCLAIMER
Angel Broking Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited, Bombay
Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with CDSL a nd
Portfolio Manager and Investment Adviser with SEBI. It also has registration with AMFI as a Mutual Fu nd Distributor. Angel Broking
Limited is a registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide regi stration
number INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for
accessing /dealing in securities Market. Angel or its associates/analyst has not received any compensation / managed or co -managed
public offering of securities of the company covered by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any in vestment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this docume nt should
make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the
companies referred to in this document (including the merits and risks involved), and should consult their own adviso rs to determine
the merits and risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positio ns and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
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contrary view, if any
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
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responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in th is report.
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Disclosure of Interest Statement
RBL Bank
1. Financial interest of research analyst or Angel or his Associate or his relative
No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives
No
3. Served as an officer, director or employee of the company covered under Research
No
4. Broking relationship with company covered under Research
No
Feb 07, 2019
6