RBL Bank Ltd shares recovered sharply by as much as 15% on Wednesday after the lender announced that it was adequately capitalised and the rumours circulating in the market around its financial health were false.
“The bank has a capital adequacy ratio of 16.08% with Tier I at 15.02%, which is significantly higher than the prescribed regulatory requirement of 11.5% and 9.5%, respectively,” the management of RBL Bank said in a statement.
The statement added: “We wish to re-emphasize that RBL Bank is a fundamentally strong institution. Rumours around financial health and stability of the institution especially on social media seem to be misplaced, motivated and not based on facts.”
At 10:42 am, RBL Bank shares were trading at Rs 228.35, up 9.7%, after hitting the day’s high of Rs 239.20. The stock had lost nearly 20% in the previous session, falling below its initial public offer (IPO) price of Rs 225 per share. The stock got listed on exchanges on 31 August 2016.
RBL Bank also said that it has maintained its guidance for FY20 and termed reports of any material adverse change in its asset quality after it announced its December quarter results on 22 January as untrue.
“Our Liquidity Coverage Ratio (LCR) is at 145% of statutory requirements as at the end of last week... All our business segments are doing well, we continue to expand presence across newer geographies by adding branches and are also hiring more people as previously planned,” the bank added in the statement.
RBL Bank’s net profit had dropped 69% year-on-year to Rs 70 crore in the December quarter as total provisions had jumped nearly four times to Rs 638 crore compared with a year ago.