RBL Bank - Normalisation Some Time Away; Modest Return Profile For Now: ICICI Securities
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ICICI Securities Report
RBL Bank Ltd.’s management continues with its stance of reducing inherent business risk and lowering earnings volatility through -
- consolidation of the wholesale banking portfolio,
- cautious/selective approach in micro small and medium enterprise/loan against property, and
- ramp-up of secured retail products (home loans).
On a positive note, credit card sourcing and spends are showing signs of resurgence (key growth driver in the near term).
On asset quality, credit cost stabilisation still seems some time away given -
- stress in MSMEs and a few pockets of micro finance institutions;
- incremental stress recognition on credit card portfolio and known corporate accounts; and
- inadequate contingency buffer.
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