Q4FY2019 Result Update | Banking
Apr 20, 2019
RBL Bank
BUY
CMP
`676
Overall healthy Q4; NIM at all time high
Target Price
`775
Particulars (` cr)
Q 4FY19
Q 3FY19
% chg (qoq)
Q 4FY18
% chg (yoy)
Investment Period
12 Months
NII
739
655
13%
500
48%
Pre-prov. profit
560
498
12%
383
46%
Stock Info
PAT
247
225
10%
178
39%
Source: Company, Angel Research
Sector
Banking
RBL Bank delivered healthy set of numbers for Q4FY2019, with PAT growth of 39%
Market Cap (` cr)
28,822
yoy. On the operating front, the bank reported 48% yoy growth in NII. The NIM
Beta
1.1
qoq/yoy increased by 11/25 bps, respectively, driven by a higher yield on
52 Week High / Low
692/483
advances. The bank managed to reduce its expenses and brought down the
Avg. Daily Volume
1,17,971
cost/income ratio from 52.8% in Q4FY2018 to 51.2% in Q4FY2019.
Face Value (`)
10
BSE Sensex
39,140
Robust growth in advances; NIM register improvement: During Q4FY2019, the
Nifty
11,035
bank’s advances grew by 36.2% yoy, of which retail loan book increased 57.8%
Reuters Code
RATB BO
yoy to constitute 30% of the total advances. The corporate loans inched up by
Bloomberg Code
RBK IN
27.3% yoy. The net interest income during this period grew by 48%, which is
higher than the growth in advances. During the quarter, NIM increased by 11bps
qoq and 25bps yoy to 4.23%, aided by higher yield on advances (up 140bps yoy)
Shareholding Pattern (%)
as against cost of funds (up 83bps yoy). Rise in yield was on account of increasing
Promoters
0.0
MCLR rates as well as higher proportion of high-yielding non-wholesale book.
Moreover, a slower rise in Opex aided lower cost/income by 167bps yoy to 51.2%
MF / Banks / Indian Fls
24.8
in Q4FY2019.
FII / NRIs / OCBs
18.8
Strong asset quality: Total deposits surged by
33% yoy and 12% qoq in
Indian Public / Others
56.4
Q4FY2019. CASA deposits accounted for 25% of the total deposits. On the asset
quality front, the bank continued to maintain strong asset quality with a
GNPA/NPA ratio of 1.38%/0.69% of loans. Total slippages for the quarter were at
Abs. (%)
3m 1yr 3yr
`206cr, which declined 2.2% qoq, whereas increased 79% yoy.
Sensex
7.6
13.7
56.8
Outlook & Valuation: We expect RBL Bank to grow its advances at CAGR of 35%
RBL Bank
18.6
33.1
191.0
over FY2018-20E. Improvement in CASA, higher share of retail book and in-
house priority sector lending will support NIM going forward. At CMP, RBL trades
at 2.9x FY21E P/ABV, which we believe is attractive considering growth prospects,
3-year price chart
hence, we recommend BUY with a target price of `775 over the next 12 months.
900
Key financials (Standalone)
700
Y/E March (` cr)
F Y17
F Y18
F Y19
F Y20E
F Y21E
500
NII
1,221
1,766
2,539
3,500
4,804
300
% chg
42
27
33
34
34
100
Net profit
446
635
867
1,291
1,861
% chg
52.5
42.3
36.6
48.9
44.2
NIM (%)
2.9
3.4
3.7
3.9
4.0
Source: Company, Angel Research
EPS ( Rs)
10.6
15.1
20.7
30.8
44.4
P/E (x)
64
45
33
22
15
P/ABV (x)
6.7
4.3
3.9
3.4
2.9
Jaikishan Parmar
RoA (%)
1.0
1.1
1.2
1.4
1.5
Research Analyst
R oE (%)
12.2
11.5
12.2
15.9
19.7
022 - 39357600 Ext: 6810
[email protected]
Source: Company, Angel Research, Note: CMP as of 19/04/19
Please refer to important disclosures at the end of this report
1
RBL Bank | Q4FY2019 Result Update
Exhibit 1: Quarter Summary
Particular (` Cr)
Q 2FY18
Q 3FY18
Q 4FY18
Q 1FY19
Q 2FY19
Q 3FY19
Q 4FY19
YoY(%)
QoQ(%)
Interest Income
1,091
1,151
1,223
1,364
1,463
1,639
1,834
50.0
11.9
Interest Expe nse s
671
684
722
812
870
984
1,095
51.7
11.3
Net Interest Income (NII)
420
467
500
553
593
655
739
47.6
12.8
Other Income
241
258
312
326
333
374
409
31.2
9.4
Total Income
1,332
1,409
1,535
1,690
1,797
2,013
2,243
46.2
11.4
Net Income
661
726
812
879
926
1,029
1,148
41.3
11.5
Operating Expenses
358
392
429
446
477
531
588
36.9
10.8
Empl oyee Expenses
144
144
131
153
150.91
164.06
168.2
28.9
2.5
Cost / Income %
54.2%
54.0%
52.8%
50.8%
51.5%
51.6%
51.2%
(162.7)
(34.6)
Operating Profit
303
333
383
432
449
498
560
46.2
12.3
Provisions
75
82
113
140
139.68
160.68
199.97
77.2
24.5
PBT
228
251
270
292
309
338
360
33.2
6.6
Provisions for Tax
78
86
92
102
104.83
112.6
112.84
22.5
0.2
Tax Rate %
34.0%
34.2%
34.1%
34.9%
33.9%
33.3%
31.3%
(274.6)
(199.2)
PAT
151
165
178
190
205
225
247
38.8
9.8
Balance Sheet
Advances
33,576
36,890
40,268
42,198
45,873
49,893
54,308
34.9
8.8
Deposits
36,569
38,623
43,902
44,950
47,790
52,187
58,394
33.0
11.9
Savings
5,449
5,214
5,356
5,799
6,022
6,523.4
8,233.6
53.7
26.2
Current
3,218
4,055
5,356
5,214
5,687
6,314.6
6,365.0
18.8
0.8
CASA
8,667
9,270
10,712
11,013
11,709
12,838
14,599
36.3
13.7
CASA%
23.7%
24.0%
24.4%
24.5%
24.50%
24.60%
25.00%
60.0
40.0
Profitability
Q 2FY18
Q 3FY18
Q 4FY18
Q 1FY19
Q 2FY19
Q 3FY19
Q 4FY19
YoY (bps)
QoQ (bps)
Yield Advance
10.13
10.09
9.88
10.45
10.66
11.11
11.28
140.0
16.2
Cost of Fund
6.20
6.02
5.77
6.09
6.28
6.57
6.60
83.2
3.8
NIM Calculated
3.44
3.60
3.53
3.67
3.80
3.90
4.01
47.7
10.3
Spread
3.93
4.07
4.10
4.37
4.38
4.55
4.67
56.8
12.4
NIM Reported
3.74
3.89
3.98
4.04
4.08
4.12
4.23
25.0
11.0
ROE
11.2
10.4
10.8
11.2
11.7
12.6
13.3
251.3
75.6
ROA
1.19
1.23
1.22
1.22
1.26
1.29
1.30
8.1
0.3
Capital Adequacy (%)
Tier 1
14.50
14.10
13.60
13.10
12.50
12.50
12.10
(150.0)
(40.0)
Tier 2
2.10
1.80
1.70
1.50
1.20
1.30
1.36
(34.0)
6.0
Total
16.60
15.90
15.30
14.60
13.70
13.80
13.46
(184.0)
(34.0)
Asset Quality
GNPA%
1.40
1.60
1.40
1.40
1.42
1.38
1.38
(2.0)
-
NPA%
0.80
1.00
0.80
0.70
0.74
0.72
0.69
(11.0)
(3.0)
Restructured Asset %
0.41
0.18
0.08
0.10
0.07
0.09
0.04
(4.0)
(5.0)
PCR Calculated %
43
38
43
50
48
48
50
714.3
217.4
PCR Reported %
58
53
58
60
62
63
65
730.0
200.0
GNPA (`)
487
580
567
596
645
696
755
33.2
8.5
NPA (`)
261
358
313
316
339
358
373
19.2
4.0
Slippages (`)
92
210
115
148
142
211
206
79.1
(2.4)
Slippages %
0.27
0.57
0.29
0.35
0.31
0.42
0.38
9.4
(4.4)
Source: Company, Angel Broking,
Apr 20, 2019
2
RBL Bank | Q4FY2019 Result Update
Exhibit 2: Advances trend and mix
Particular (` Cr)
Q 2FY18
Q 3FY18
Q 4FY18
Q 1FY19
Q 2FY19
Q 3FY19
Q 4FY19
YoY(%)
QoQ(%)
C&IB
13,895
15,606
16,240
17,149
18,826
19935
21354
31.5
7.1
CB
6,528
7,106
7,512
7,837
8,303
8,541
8,875
18.1
3.9
Wholesale
20,423
22,712
23,752
24,986
27,129
28,476
30,229
27.3
6.2
Retail Asset
8,539
9,397
10,434
11,361
12,407
14,644
16,467
57.8
12.4
DB&FI
4,614
4,781
5,684
5,851
6,337
6,773
7,611
33.9
12.4
-Micro banking
2,533
2,886
3,560
3,698
3,917
4,220
5,028
41.2
19.1
-IFI
1,616
1,358
1,543
1,503
1,669
1,685
1,579
2.3
-6.3
-MSME
465
536
581
649
751
868
1,004
72.8
15.7
Non-Wholesale
13,153
14,178
16,118
17,212
18,744
21,417
24,078
49.4
12.4
Total
33,576
36,890
39,870
42,198
45,873
49,893
54,307
36.2
8.8
A dvance Mix (%)
YoY (bps) QoQ (bps)
C&IB
41.4
42.3
40.7
40.6
41.0
40.0
39.3
(141.1)
(63.5)
CB
19.4
19.3
18.8
18.6
18.1
17.1
16.3
(249.9)
(77.6)
Wholesale
60.8
61.6
59.6
59.2
59.1
57.1
55.7
(391.0)
(141.1)
Retail Asset
25.4
25.5
26.2
26.9
27.0
29.4
30.3
415.2
97.1
DB&FI
13.7
13.0
14.3
13.9
13.8
13.6
14.0
(24.2)
44.0
-Micro banking
7.5
7.8
8.9
8.8
8.5
8.5
9.3
32.9
80.0
-IFI
4.8
3.7
3.9
3.6
3.6
3.4
2.9
(96.3)
(47.0)
-MSME
1.4
1.5
1.5
1.5
1.6
1.7
1.8
39.2
10.9
Non-Wholesale
39.2
38.4
40.4
40.8
40.9
42.9
44.3
391.0
141.1
Total
100.0
100.0
100.0
100.0
100.0
100.0
100.0
-
-
Source: Company, Angel Broking
Exhibit 3: Core fee growing at healthy rate supported by credit card fees
Particular
Q 2FY18
Q 3FY18
Q 4FY18
Q 1FY19
Q 2FY19
Q 3FY19
Q 4FY19 YoY(%) QoQ(%)
Other Income
241
258
312
326
333
374
409
31.2
9.4
Trading
39
28
41
36
7
26
29
(29.4)
9.4
Core Fees
202
230
271
290
326
348
381
40.2
9.4
FX
34
34
38
35
39
38
42
9.9
9.1
Proc Fees
57
67
65
70
75
80
80
22.8
0.0
gen banking
30
28
38
35
46
49
38
0.7
(21.4)
Distribution
6
9
16
12
10
10
14
(14.6)
33.3
CC
55
71
90
116
131
143
143
59.2
0.0
Trades & other
20
21
27
23
29
28
31
15.4
12.5
Total
202
230
274
290
330
348
348
26.9
0.0
Source: Company, Angel Broking
Apr 20, 2019
3
RBL Bank | Q4FY2019 Result Update
Income Statement
Y/E March (` cr)
F Y17
F Y18
F Y19
F Y20E
F Y21E
Net Interest Income
1,221
1,766
2,539
3,500
4,804
- YoY Growth (%)
49
45
44
38
37
Other Income
755
1,068
1,442
1,914
2,498
- YoY Growth (%)
54
41
35
33
31
Operating Income
1,977
2,834
3,982
5,415
7,302
- YoY Growth (%)
51
43
40
36
35
Operating Expenses
1,056
1,504
2,042
2,726
3,591
- YoY Growth (%)
38
42
36
33
32
Pre - Provision Profit
920
1,331
1,940
2,689
3,711
- YoY Growth (%)
70
45
46
39
38
Prov. & Cont.
239
365
641
733
891
- YoY Growth (%)
109
53
76
14
22
Profit Before Tax
681
966
1,299
1,956
2,820
- YoY Growth (%)
59
42
34
51
44
Prov. for Taxation
235
331
432
665
959
- as a % of PBT
35
34
33
34
34
PAT
446
635
867
1,291
1,861
- YoY Growth (%)
53
42
37
49
44
Balance Sheet
Y/E March (` cr)
F Y17
F Y18
F Y19
F Y20E
F Y21E
Equity
375
420
427
427
427
Reserve & Surplus
3,960
6,264
7,121
8,218
9,800
Networth
4,336
6,684
7,547
8,645
10,227
De posits
34,588
43,902
58,394
78,395
1,05,272
- Growth (%)
42
27
33
34
34
Borrowings
7,980
9,261
11,832
15,855
21,246
Other Liab. & Prov.
1,785
2,003
2,585
4,925
7,971
Total Liabilities
48,689
61,851
80,359
1,07,819
1,44,715
Cash Balance s
2,948
2,589
8,440
4,788
6,428
Bank Balances
1,246
1,695
1,763
2,736
3,673
Investments
13,482
15,448
16,840
23,938
32,142
A dvances
29,449
40,268
54,308
73,316
98,977
- Growth (%)
39
37
35
35
35
Fixed Assets
259
334
402
616
826
Other Assets
1,306
1,517
2,206
2,426
2,669
Total Assets
48,689
61,851
83,959
1,07,819
1,44,715
Apr 20, 2019
4
RBL Bank | Q4FY2019 Result Update
Key Ratios
Y/E March
FY16
FY17
FY18
FY19E
FY20E
FY21E
Profitability ratios (%)
NIMs
2.6
2.9
3.4
3.7
3.9
4.0
Cost to Income Rati o
58.6
53.4
53.0
51.3
50.3
49.2
RoA
0.9
1.0
1.1
1.2
1.4
1.5
RoE
11.2
12.2
11.5
12.2
15.9
19.7
B/S ratios (%)
CASA Ratio
0.19
0.22
0.24
0.25
0.26
0.26
Credit/Deposit Ratio
0.9
0.9
0.9
0.9
0.9
0.9
A sset Q uality (%)
Gross NPAs
0.98
1.21
1.41
1.33
1.25
1.25
Gross NPAs (Amt)
208.1
356.8
566.7
722.3
916.5
1,237.2
Net NPAs
0.59
0.64
0.78
0.73
0.73
0.73
Net NPAs (Amt)
124.4
189.9
314.0
396.5
535.2
722.5
Credit Cost on Advance
0.54
0.81
0.91
1.18
1.00
0.90
Provision Coverage
60%
53%
55%
55%
58%
58%
Per Share Data (`)
EPS
7.0
10.6
15.1
20.7
30.8
44.4
BV
71.2
103.3
159.3
179.8
206.0
243.7
ABVPS (70% cover.)
69.8
101.3
155.8
175.6
199.8
235.3
DPS
1.5
1.8
2.3
3.1
4.6
6.7
Valuati on Ratios
PER (x)
97.1
63.7
44.8
32.8
22.0
15.3
P/BV
9.5
6.6
4.3
3.8
3.3
2.8
P/ABVPS (x)
9.7
6.7
4.3
3.9
3.4
2.9
Dividend Yield
0.2
0.3
0.3
0.5
0.7
1.0
Note - Valuation done closing price of 19/04/19
Apr 20, 2019
5
RBL Bank | Q4FY2019 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 Fund Dis tributor. Angel Broking
Limited is a registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration
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 o r 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 document 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 advisors 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 p rice movement, outstanding positions 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
fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the
contrary view, if any
The information in this document has been printed on the basis of publicly available information, internal data and other rel iable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any wa y
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we can not
testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.
While Angel Broking Limited endeavors to update on a reasonable basis the information discussed in this material, there may be
regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduc ed,
redistributed or passed on, directly or indirectly.
Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from
or in connection with the use of this information.
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
Apr 20, 2019
6