Buzzing stock | Rbl Bank shares hit their lowest level in 52 weeks, tumbling 10%; here’s why

RBL Bank shares fell 10% on Thursday amid negative news. A Rs A 300 crore loan that was written off within seven months of its sanction became the main reason for the banking regulator’s sudden intervention in private lender RBL Bank, according to a press report.

At 10:46 a.m., RBL Bank shares fell 9.3% to Rs 130.9 on BSE and hit a 52-week low at Rs 130.5.

The bank granted a loan to a company as part of a lender consortium in 2018, and RBI has requested details of the bank’s loan portfolio from the risk department in recent months, according to the report.

“RBI had not explicitly reported on any particular transaction, but sensing that things were not going well, some members of the RBL Bank board decided to meet with Vice Governor Rajeshwar Rao on November 29 to obtain clarification, but they had no idea what RBI was. planning, “the report adds.
Earlier this week, after Vishwavir Ahuja stepped down as managing director and CEO, the central bank appointed chief managing director Yogesh K Dayal as an additional director on the board of RBL Bank. This, along with gloomy brokerage comments, worried investors, triggering a massive sell-off in bank stocks. The stock fell more than 20% on Monday.

So far this week, RBL Bank shares have fallen by around 26%.

CNBC-TV18 reported on Tuesday that the central bank’s decision on RBL Bank was due to an apparent delay in identifying a successor. It is understood that the RBI was a little concerned that the process of identifying the successor to RBL Bank was not going as fast as it should have been. The reason RBI expedited the process was to ensure it was completed by June 2022, CNBC-TV18 reported.

Analysts said there is uncertainty at the senior management level and that this instability is likely to impact the lender’s earnings growth with short-term downside risk.

“We believe that with recent developments there may be potential short-term pressure on the stock due to the lingering uncertainty,” brokerage firm Sharekhan said.

The national brokerage firm added that it would like to monitor the coming third quarter results and the bank’s performance, as well as management’s comments on the same and the business strategy ahead.

First publication: STI

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