RESULTS REVIEW 4QFY19 19 APR 2019

RBL Bank
BUY
Ticks all the boxes, again INDUSTRY BANKS
An all round 4Q show and an impending (book accretive)  Headline asset quality metrics (G/NNPAs at ~138/69bps) are CMP (as on 18 Apr 2019) Rs 675
fund raise justify our positive stance on RBK. Maintain stable. Slippage eased ~20bps QoQ to ~1.58%. The marginal Target Price Rs 803
BUY with a TP of Rs 803 (3x Mar-21E ABV of Rs 268). stress uptick in C&IB and BBB segments was offset by a Nifty 11,753
reduction in the CB and DB&FI segments. Agri stress has
HIGHLIGHTS OF THE QUARTER Sensex 39,140
risen, post loan waiver announcements. We have factored in
 Strong fee growth at ~43/12% YoY/QoQ, driven by card fees slippages of 1.6% over FY19-21E. KEY STOCK DATA
continues to pleasantly surprise. Card fees grew at ~78/12%  With Tier-1 at 12.1%, a fund raise (we have assumed Rs 35bn Bloomberg RBK IN
YoY/QoQ, constituting ~41% of fees. As the no. of cards (~2x at Rs 650/sh) is imminent in FY20. It will be BV accretive and No. of Shares (mn) 426
YoY) and card spends (~2x) continue to grow at healthy achieve the desirable effect of keeping valuations attractive. MCap (Rsbn) / ($ mn) 288 / 4,136
rates, we expect fees to grow at 29% CAGR over FY 19-21E.  Near term outlook: Given the all round good showing, the 6m avg traded value (Rs mn) 1,097
 Robust momentum sustained in 4Q as well. Loans grew stock should remain stable to buoyant. STOCK PERFORMANCE (%)
+34/9% YoY/QoQ, led by the retail segment (+58/12%; 44%
STANCE 52 Week high / low Rs 692/438
of loans), esp. the credit card portfolio (Rs 53bn) which grew
~2.4x/18% YoY/QoQ. Ex-retail, growth was driven by the With an unblemished record, abundant opportunity and 3M 6M 12M
DB&FI segment, at ~34/12%. We have factored in a 34% focus on high yielding granular credit segments, RBK will Absolute (%) 18.6 25.6 32.4
overall loan CAGR over FY19-21E, a conservative stance. sustainably outperform peers on growth and margins. Op- Relative (%) 11.0 13.0 18.6
 Margins expanded (9th consecutive qtr) ~25/11bps YoY/QoQ lev and credit costs (esp. on the cards portfolio) are key SHAREHOLDING PATTERN (%)
to ~4.23%. Yields grew ~60bps sequentially to ~11.8% ahead monitorables, as they drive RoAA expansion hereon. With Dec-18 Mar-19
of CoF (6.8%, 20bps). The rise in yields is attributed to MCLR a book value-accretive fund raise in FY20, RBK can get
Promoters - -
resets as well as an increase in the share of higher yielding capital to fuel its ambitious growth aspirations. Our opex
FIs & Local MFs 25 25.93
retail assets (esp. CC, micro banking and MSME). We have (29% CAGR) and flattish NIM assumptions (3.9%) over
factored NIMs of 3.9% over FY 19-21E, again conservatively. FY19-21E provide upside risk to estimates. FPIs 36.3 38.38
Public & Others 38.7 35.69
FINANCIAL SUMMARY
Pledged Shares Nil Nil
(Rs mn) 4QFY19 4QFY18 YoY (%) 3QFY19 QoQ (%) FY17 FY18 FY19P FY20E FY21E
Net Interest Income 7,387 5,005 47.6% 6,551 12.8% 12,213 17,663 25,395 32,588 42,931 Source : BSE
PPOP 5,600 3,831 46.2% 4,985 12.3% 9,204 13,311 19,398 24,162 31,604
PAT 2,472 1,781 38.8% 2,252 9.8% 4,176 6,351 8,669 12,206 16,136
EPS (Rs) 5.8 4.2 36.5% 5.3 10.1% 11.1 15.1 20.3 25.4 33.6 Darpin Shah
ROAE (%) 11.4 11.5 12.2 12.5 12.7 darpin.shah@hdfcsec.com
ROAA (%) 0.95 1.15 1.22 1.31 1.34 +91-22-6171-7328
Adj. BVPS (Rs) 110.4 151.8 168.8 243.0 267.5
P/ABV (x) 6.12 4.45 4.00 2.78 2.52 Aakash Dattani
P/E (x) 60.7 44.6 33.2 26.6 20.1 aakash.dattani@hdfcsec.com
Source: Bank, HDFC sec Inst Research +91-22-6171-7337

HDFC securities Institutional Research is also available on Bloomberg HSLB <GO>& Thomson Reuters

 Retail drives growth : Book growth (+35/9% YoY) was
driven by the retail segment (+58/12%, 44% of loans).
Retail growth, in turn, was driven by credit cards
(~2.4x/18%, ~9.7% of overall loans), followed by LAP
loans (~55/14%, ~12% of loans). Retail agri loans
remained flat YoY & QoQ. In the DB&FI segment,
growth was led by micro-banking (+41/19%) and
MSME loans (+73/16%).
 Deposit franchise building up on rate lure: Deposit
growth remained healthy at 33/12% YoY/QoQ, led by
CASA growth of ~36/14% (to form ~25% of deposits).
The healthy CASA traction was led by a whopping
~54/26% growth in SA deposits. The mgt
ambiguously attributed the sequential jump in SA to
its focus on ‘previously underexploited segments’
resulting in deposit mobilisation. With a
differentiated rate offering (avg cost of SA: ~6.5%)
and an expanding branch network, we expect the
current pace of deposit mobilisation to sustain. We
have factored in deposit growth of ~32% over FY19-
21E.
RBL BANK : RESULTS REVIEW 4QFY19
 Furious expansion continues, op-lev can wait: As the
bank continues to expand rapidly, (added ~60
branches over FY19 on a base of 265 branches and
expects to add another ~60-80 branches over FY20E),
we expect op-lev benefits to take some more time to
kick in. Management guided for a C-I ratio of ~51%
over FY20-21E. We have factored in a core C-I ratio of
~51.7% over FY19-21E.
 Coverage healthy, credit costs to ease: Provisions
grew ~77/25% YoY/QoQ as the bank shored up
coverage. Reported coverage increased ~200bps QoQ
to ~65%. With higher provisions towards MFI
portfolio and Agri portfolio behind (along with
superior asset quality performance), we expect LLPs
to dip here on. However we have still factored LLP of
~80bps over FY19-21E vs. ~70bps over FY17-19.
 Stressed sector exposure a concern? It is noteworthy
that exposure to sectors such as construction, power,
real estate and NBFCs amounts to ~16% of the bank’s
total exposure. The bank has not seen any significant
buildup in stress as yet, and claims to have exposure
to better rated players in these sectors.
Page | 2
 RBL BANK : RESULTS REVIEW 4QFY19

Five Quarters At A Glance

9% ahead of estimates, driven by
(Rs mn) 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 YoY Growth QoQ Growth
Net Interest Income 5,005 5,527 5,930 6,551 7,387 47.6% 12.8% ~11bps QoQ NIM expansion and ~9%
Non Interest Income 3,120 3,260 3,331 3,741 4,092 31.2% 9.4% advances growth
Core Fee Income 2,714 2,901 3,264 3,479 3,888 43.2% 11.8%
Treasury Income 406 359 67 262 205 -49.5% -21.9% Fee Income growth was led by Card fees
Operating Income 8,124 8,787 9,261 10,291 11,480 41.3% 11.5%
(41% of total fees, 12% QoQ) and
Operating Expenses 4,293 4,464 4,770 5,307 5,880 36.9% 10.8%
Pre provision Profits 3,831 4,323 4,490 4,985 5,600 46.2% 12.3% Distribution fees (+49% QoQ)
Other Provisions 1,129 1,404 1,397 1,607 2,000 77.2% 24.5%
PBT 2,702 2,920 3,094 3,378 3,600 33.2% 6.6%
Provision for Tax 921 1,019 1,048 1,126 1,128 22.5% 0.2% Other opex grew ~41/15% YoY/QoQ as
PAT 1,781 1,900 2,045 2,252 2,472 38.8% 9.8% branch expansion continued (added ~36
branches in 4Q and 59 in FY19)
Balance Sheet items/ratios
Deposits (Rs bn) 439.0 449.5 477.9 521.9 583.9 33.0% 11.9%
CASA Ratio (%) 24.4 24.5 24.5 24.6 25.0 60 bps 40 bps SA grew ~54/26%, while CA grew
Advances (Rs bn) 402.7 422.0 458.7 498.9 543.1 34.9% 8.9% ~19/1% YoY/QoQ
Wholesale 241.5 249.9 271.3 284.8 302.3 25.2% 6.2%
BBB (Branch & Business Banking) 104.3 113.6 124.1 146.4 164.7 57.8% 12.5%
DB &FI 56.8 58.5 63.4 67.7 76.1 33.9% 12.4% Wholesale advances constitute ~56% of
Retail (BBB + DB&FI) 161.2 172.1 187.4 214.2 240.8 49.4% 12.4% total advances, within which Corp & Inst
CD Ratio (%) 91.7 93.9 96.0 95.6 93.0 128 bps -260 bps Banking accounts for ~71%
CAR (%) 15.3 14.6 13.7 12.9 13.5 -184 bps 60 bps
Tier I (%) 13.6 13.1 12.5 11.6 12.1 -150 bps 52 bps
PROFITABILITY
Yield on Advances (%) 10.50 10.80 10.90 11.20 11.80 130 bps 60 bps Wholesale yields rose 10bps QoQ to
Cost of Funds (%) 6.20 6.40 6.40 6.60 6.80 60 bps 20 bps 8.9% while retail yields were flat QoQ at
NIM (%) 3.98 4.04 4.08 4.12 4.23 25 bps 11 bps 14.3%
Cost-Income (%) 52.8 50.8 51.5 51.6 51.2 -163 bps -35 bps
Tax Rate (%) 34.1 34.9 33.9 33.3 31.3 -275 bps -199 bps
ASSET QUALITY NIMs rose for the 9th straight qtr
Gross NPA (Rs mn) 5,667 5,959 6,450 6,955 7,546 33.2% 8.5%
Net NPA (Rs mn) 3,126 3,158 3,386 3,582 3,727 19.3% 4.0%
Gross NPAs (%) 1.40 1.40 1.40 1.38 1.38 -2 bps 0 bps Marginal deterioration in asset quality
Net NPAs (%) 0.78 0.75 0.74 0.72 0.69 -9 bps -3 bps across segments; Corp (+32% QoQ;
Calculated Slippages (%) 1.24 1.44 1.29 1.76 1.58 34 bps -18 bps 1.38%), Agri (+17% QoQ) and BBB (+19%
Coverage Ratio reported (%) 57.6 60.4 61.5 63.2 65.3 773 bps 208 bps QoQ)
Restructured book (%) 0.08 0.10 0.07 0.09 0.04 -4 bps -5 bps
Net stressed assets (%) 0.86 0.85 0.81 0.81 0.73 -13 bps -8 bps
Source: Bank, HDFC sec Inst Research

Page | 3
 RBL BANK : RESULTS REVIEW 4QFY19

Engineering (5.3%), Advances Grew ~35/9% YoY/QoQ Retail Continues To Gain Share
Construction (4.9%), Retail Loan Rs bn QoQ Chg (%) - RHS Wholesale Retail
600 18.0
(4.4%), NBFCs (3.9%) & Real 16.0
100%
Estate (3.6%) are the Top5 500
14.0

38.1

38.4
38.6
38.7

38.8

39.2
39.3
39.3

39.4

40.0
40.8
40.9
42.9
80%

44.3
sectors in terms of exposure 400 12.0
10.0 60%
300
Wholesale advances 8.0
40%
200 6.0
constitute 55.7% of total Adv.,
4.0 20%
the mgt aims to maintain a 100
2.0
50:50 mix between wholesale - - 0%
and non-wholesale advances

3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19

3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
Wholesale advances grew
Source: Bank, HDFC sec Inst Research Source: Bank, HDFC sec Inst Research; Reclassification from
~25% YoY driven by Corp & 3QFY19
Inst Banking while Non-
Breakup Of Loans: Mix Largely Stable Sequentially
wholesale advances grew 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
~49% Rs bn 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17
FY18* FY18* FY18* FY18* FY19* FY19* FY19* FY19*
C&IB 69.4 81.9 88.7 105.9 115.4 123.4 130.8 139.0 156.1 162.4 171.5 188.3 199.4 213.5
Amongst retail advances, CC CB 42.8 46.9 46.5 46.2 50.3 55.1 60.1 65.3 71.1 75.1 78.4 83.0 85.4 88.8
Wholesale 112.2 128.8 135.3 152.2 165.8 178.5 190.9 204.2 227.1 237.5 249.9 271.3 284.8 302.3
grew ~2.4x YoY, MSME grew
% of total loans 61.3 60.7 60.7 61.2 61.9 60.6 61.4 60.8 61.6 59.0 59.2 59.1 57.1 55.7
~73%, LAP grew ~55% and BBB (LAP, Credit Cards, etc.) 30.6 34.6 37.3 43.4 47.9 53.7 78.2 85.4 94.0 104.3 113.6 124.1 146.4 164.7
Micro-Banking grew ~41% Agri 14.6 17.6 18.3 16.8 17.5 21.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
FI 25.6 31.3 31.7 36.4 36.6 41.2 42.0 46.1 47.8 56.8 58.5 63.4 67.7 76.1
Cards constitute ~9.7% of the Retail 70.8 83.5 87.4 96.6 102.0 116.0 120.2 131.5 141.8 165.2 172.1 187.4 214.2 240.8
% of total loans 38.7 39.3 39.3 38.8 38.1 39.4 38.6 39.2 38.4 40.0 40.8 40.9 42.9 44.3
book & account for ~41% of
TOTAL 183.0 212.2 222.6 248.7 267.7 294.5 311.1 335.8 368.9 402.7 422.0 458.7 498.9 543.1
Fees Source: Bank, HDFC sec Inst Research; C&IB – Corporate & Institutional Banking, CB – Commercial Banking, BBB – Branch & Business Banking, FI –
Financial Inclusion; *Not comparable with other quarters owing to reclassification of agri loans
The bank has ~1.71mn cards Breakup Of Fee Streams: Card Fees Holds The Lion’s Share At 41%
in force of which ~48% are co- % 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19
branded cards Forex 17 14 19 20 21 16 19 17 15 14 12 12 11 12
Processing fees 47 41 39 39 35 38 31 28 29 24 24 23 23 23
Fees a/c for ~45% of the cards General Banking 14 19 16 14 16 19 15 15 12 14 12 14 14 11
Distribution # 12 13 15 16 18 4 3 4 4 6 4 3 3 4
business revenues vs. ~50% Trade and others 10 13 11 11 9 9 9 10 9 10 8 8 8 9
QoQ Credit Cards 0 0 0 0 0 15 23 25 31 33 40 40 41 41
Source: Bank, HDFC sec Inst Research; # includes credit card fees till 3QFY17

Page | 4
 RBL BANK : RESULTS REVIEW 4QFY19

Deposit Growth Robust At ~33/12% YoY/QoQ CASA Ratio Up 40bps QoQ To ~25 %
SA grew at ~54/26% YoY/QoQ Deposits Rs bn QoQ Chg (%) - RHS SA (%) CA (%)
while CA grew at ~19/1% 700 18.0

600 16.0

The C-I ratio remained stable 14.0

10.9
8.8
10.5

11.6
11.9
12.1
12.2
500

11.2

9.0
QoQ at ~51.2% 12.0

10.9
9.9
400 10.0

10.3
10.3
11.4
300 8.0
Adjusted for treasury gains,
6.0
Core C-I ratio improved ~80bps

14.9

14.1
200

13.5
13.1

12.9
12.6
12.5
12.2
12.0
11.1
4.0

10.0
QoQ to 52.1%.

8.2
7.9
7.2
100 2.0
- -
Other opex grew ~40.5/15%

3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
YoY/QoQ as the bank
continued to add branches
(+36branches in 4Q) Source: Bank, HDFC sec Inst Research Source: Bank, HDFC sec Inst Research

The mgt guided for the

addition of ~60-80 branches C-I Ratio: Sequentially Stable (51.2%) NIMs Continue To Rise, Up 11bps QoQ (25bps YoY)
over FY20E, we thus expect 60.0
C-I Ratio (%) C-AA (%) - RHS
3.1
NIM (%) Yield (%) CoF (%)
opex to remain elevated 3.0 12.0
58.0
2.9
10.0
The mgt guided for a C-I ratio 56.0 2.8
2.7 8.0
of ~51% over FY20-21E 54.0 2.6
2.5 6.0

4.2
4.1
4.1
4.0
4.0
3.9
52.0

3.7
3.5
3.5
3.4
3.4
Wholesale yields rose 10bps

3.2
3.1
2.4

2.8
4.0
QoQ to 8.9% (MCLR hike and 50.0 2.3
2.2 2.0
reset) while retail yields were 48.0
2.1
flat QoQ at 14.3% 46.0 2.0
-

3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19

Source : Bank, HDFC sec Inst Research Source : Bank, HDFC sec Inst Research

Page | 5
 RBL BANK : RESULTS REVIEW 4QFY19

G/NNPA (%) Stable Sequentially Restructured Book At A Mere 4bps

Reported PCR further GNPA (Rs mn) NNPA (Rs mn) Rs mn % of Loans - RHS %
Rs mn
GNPA (%) - RHS NNPA (%) - RHS
improved ~200bps QoQ to Rs bn % 1,600 0.50
8,000 1.8 1,400
65.3% 1.6 0.40
7,000 1,200
6,000 1.4
1,000 0.30
Slippages were stable 5,000 1.2
1.0 800
sequentially at ~Rs 2.06n i.e. 4,000
0.8 600 0.20
3,000
calc. 1.58% ann. (vs. ~Rs 2.1bn 0.6 400
2,000 0.4 0.10
i.e. 1.76% QoQ) 1,000 0.2
200
0 0.0 - -
No sales were made to ARCs

3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
during the qtr
Source : Bank, HDFC sec Inst Research Source : Bank, HDFC sec Inst Research
Marginal deterioration in asset
quality across segments; Corp Slippages: Stable Sequentially
Rs bn 9MFY16 FY16 1QFY17 1HFY17 9MFY17 FY17 1QFY18 1HFY18 9MFY18 FY18 1QFY19 2QFY19 3QFY19 4QFY19
(+32% QoQ; 1.38%), Agri
Opening 1,110 1,110 2,080 2,080 2,080 2,080 3,570 3,570 3,570 5,800 5,670 5,970 6,450 6,960
(+17% QoQ) and BBB (+19%
Slippages 1,660 2,000 680 1,060 1,280 5,330 1,520 2,440 4,540 1,150 1,480 1,420 2,110 2,060
QoQ) % ann. 1.09 1.09 1.28 1.00 1.00 2.51 2.07 1.66 2.05 1.19 1.44 1.29 1.76 1.58
Reductions 770 1,030 230 400 510 3,850 520 1,140 2,310 1,280 1,180 940 1,600 1,470
Management attributed Closing 2,000 2,080 2,530 2,740 2,850 3,560 4,570 4,870 5,800 5,670 5,970 6,450 6,960 7,550
deterioration in agri asset Source: Bank, HDFC sec Inst Research
quality to the announcement Segmental GNPAs: Rise Across Segments
of farm loan waivers; but Rs bn 9MFY16 FY16 1QFY17 1HFY17 9MFY17 FY17 1QFY18 1HFY18 9MFY18 FY18 1QFY19 1HFY19 9MFY19 FY19
expects quality to improve C&IB 171 171 266 378 378 1,038 1,030 1,028 1,422 831 923 921 921 1,215
hereon CB # 1,344 1,384 1,589 1,592 1,604 1,389 1,438 1,236 1,057 1,264 2,187 2,551 2,496 2369
BBB # 312 378 472 550 617 763 865 1,037 1,108 1,138 1,675 2,007 2,865 3398
LAP 6 42 61 85 128 199 153 254 253 259 306 289 NA NA
O/S Security Receipts were at
Biz Loans 39 34 56 78 108 159 197 186 257 316 323 254 NA NA
a mere 1bp vs. 5bps QoQ PL 6 8 13 19 27 43 57 77 85 118 159 166 NA NA
Cards 29 46 69 81 84 98 144 158 193 199 333 399 NA NA
The gross stressed book Others 232 248 273 285 270 264 315 362 320 237 164 220 NA NA
further dipped to 1.42% Agri# 58 66 102 107 117 181 - 264 576 815 NA NA NA NA
FI 106 82 98 119 131 197 1,012 1,307 1,635 1,628 1,174 970 673 564
TOTAL 1,991 2,081 2,527 2,746 2,847 3,568 4,345 4,872 5,798 5,667 5,959 6,449 6,955 7,546
Source: Bank, HDFC sec Inst Research; # Agri is now split into wholesale and retail and included in CB and BBB respectively

Page | 6
 RBL BANK : RESULTS REVIEW 4QFY19

Change In Estimates
We have factored in a fund
FY20E FY21E
raise of Rs 35bn at Rs 650 Rs mn
Old New Change Old New Change
NII 32,384 32,588 0.6% 42,359 42,931 1.4%
PPOP 23,622 24,162 2.3% 31,177 31,604 1.4%
PAT 11,736 12,206 4.0% 15,835 16,136 1.9%
Adj. BVPS (Rs) 231 243 5.2% 256 268 4.5%
Source: HDFC sec Inst Research

Peer Set Comparison

Mcap CMP TP ABV (Rs) P/E (x) P/ABV (x) ROAE (%) ROAA (%)
Rating
(Rs bn) (Rs) (Rs) FY19E FY20E FY21E FY19E FY20E FY21E FY19E FY20E FY21E FY19E FY20E FY21E FY19E FY20E FY21E
KMB # 2,612 1,370 BUY 1,458 207 237 272 43.3 33.8 27.2 5.36 4.60 3.93 12.8 14.0 15.0 1.69 1.75 1.76
ICICIBC # 2,600 404 BUY 443 124 143 166 52.2 15.4 11.0 2.48 2.04 1.65 3.8 10.2 12.3 0.41 1.19 1.39
AXSB 2,010 771 BUY 894 224 266 308 42.2 20.9 15.7 3.30 2.78 2.40 6.9 12.6 14.9 0.62 1.11 1.29
IIB 1,220 1,764 BUY 2,009 411 515 574 37.3 24.6 18.0 4.30 3.43 3.07 12.1 15.2 18.0 1.24 1.46 1.62
RBL 288 675 BUY 803 169 243 268 33.2 26.6 20.1 4.00 2.78 2.52 12.2 12.5 12.7 1.22 1.31 1.34
FB 191 97 NEU 96 57 65 74 16.2 12.3 9.3 1.69 1.50 1.32 9.3 11.3 13.6 0.79 0.89 1.00
CUB 148 202 BUY 244 60 70 81 21.5 18.4 15.6 3.36 2.89 2.48 15.3 15.4 15.6 1.59 1.57 1.54
KVB 63 79 NEU 77 47 46 58 36.3 19.0 10.8 1.68 1.70 1.35 2.8 5.2 8.9 0.25 0.45 0.71
DCBB 63 202 BUY 228 87 99 114 19.2 14.6 11.0 2.33 2.05 1.77 11.0 13.0 15.2 0.99 1.09 1.20
SBIN # 2,775 311 BUY 376 129 170 199 43.3 8.8 5.7 1.54 1.16 0.97 1.9 8.6 11.9 0.11 0.51 0.71
BOB 336 127 NEU 130 99 135 162 16.7 7.2 5.3 1.28 0.94 0.78 4.9 10.6 12.8 0.27 0.56 0.67
AUBANK 185 616 BUY 683 100 130 152 46.9 34.6 24.4 6.16 4.74 4.06 14.2 14.8 16.9 1.62 1.64 1.83
Source: Bank, HDFC sec Inst Research; # Adjusted for subsidiary

Page | 7
 RBL BANK : RESULTS REVIEW 4QFY19

Income Statement Balance Sheet

(Rs mn) FY17 FY18 FY19P FY20E FY21E (Rs mn) FY17 FY18 FY19P FY20E FY21E
Interest Earned 37,132 45,076 63,007 81,639 108,225 SOURCES OF FUNDS
Interest Expended 24,918 27,413 37,612 49,050 65,294 Share Capital 3,752 4,197 4,267 4,806 4,806
Net Interest Income 12,213 17,663 25,395 32,588 42,931 Reserves 39,604 62,643 71,206 115,584 128,693
Other Income 7,555 10,682 14,424 16,792 20,857 Shareholders' Funds 43,356 66,840 75,473 120,389 133,499
Fee Income (CEB) 4,912 7,226 9,911 12,490 16,455 Savings 38,486 53,395 82,336 111,152 150,054
Treasury Income 1,189 1,665 892 950 1,050 Current 37,541 53,388 63,650 84,018 109,223
Total Income 19,768 28,345 39,819 49,380 63,788 Term Deposit 269,854 332,240 437,958 579,221 758,800
Total Operating Exp 10,564 15,034 20,420 25,218 32,184 Total Deposits 345,881 439,023 583,944 774,391 1,018,077
Employee Expense 4,461 5,507 6,362 8,511 10,613 Borrowings 79,798 92,614 118,321 135,056 156,092
PPOP 9,204 13,311 19,398 24,162 31,604 Other Liabilities 17,711 20,031 25,850 31,020 36,693
Provisions & Contingencies 2,362 3,645 6,407 6,079 7,699 Total Liabilities 486,746 618,508 803,588 1,060,856 1,344,361
Prov. for NPAs (incl. std prov.) 1,975 2,995 4,016 5,429 7,199
PBT 6,842 9,665 12,991 18,083 23,904 APPLICATION OF FUNDS
Provision for Tax 2,382 3,315 4,322 5,877 7,769 Cash & Bank Balance 41,936 42,844 66,021 109,925 104,148
PAT 4,460 6,351 8,669 12,206 16,136 Investments 134,815 154,473 168,404 196,118 240,664
Exp. Item 285 0 0 0 0 G-Secs 98,012 113,220 119,564 154,878 203,615
APAT 4,176 6,351 8,669 12,206 16,136 Advances 294,490 402,678 543,080 726,168 967,951
Source: Bank, HDFC sec Inst Research Fixed Assets 2,587 3,340 4,025 4,508 5,049
Other Assets 12,916 15,172 22,058 24,138 26,551
Total Assets 486,746 618,508 803,588 1,060,856 1,344,361
Source: Bank, HDFC sec Inst Research

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 RBL BANK : RESULTS REVIEW 4QFY19

Key Ratios
FY17 FY18 FY19P FY20E FY21E FY17 FY18 FY19P FY20E FY21E
VALUATION RATIOS ASSET QUALITY
EPS (Rs) 11.1 15.1 20.3 25.4 33.6 Gross NPLs (Rsm) 3,568 5,667 7,547 9,912 13,652
Earnings Growth (%) 42.8 52.1 36.5 40.8 32.2 Net NPLs (Rsm) 1,900 3,126 3,431 3,614 4,921
BVPS (Rs) 115.5 159.2 176.8 250.5 277.8 Gross NPLs (%) 1.20 1.40 1.39 1.36 1.41
Adj. BVPS (Rs) 110.4 151.8 168.8 243.0 267.5 Net NPLs (%) 0.64 0.78 0.63 0.50 0.51
DPS (Rs) 1.8 2.1 2.7 4.1 5.4 Slippages (%) 2.1% 1.6% 1.5% 1.6% 1.6%
ROAA (%) 0.95 1.15 1.22 1.31 1.34 Coverage Ratio (%) 46.8 44.8 54.5 63.5 64.0
ROAE (%) 12.2 11.5 12.2 12.5 12.7 Provision/Avg. Loans (%) 0.60 0.74 0.79 0.80 0.79
P/E (x) 60.7 44.6 33.2 26.6 20.1 ROAA TREE
P/ABV (x) 6.12 4.45 4.00 2.78 2.52 Net Interest Income 2.78% 3.20% 3.57% 3.50% 3.57%
P/PPOP (x) 27.5 21.3 14.9 13.4 10.3 Non Interest Income 1.72% 1.93% 2.03% 1.80% 1.73%
Dividend Yield (%) 0.3 0.3 0.4 0.6 0.8 Treasury Income 0.27% 0.30% 0.13% 0.10% 0.09%
PROFITABILITY Operating Cost 2.41% 2.72% 2.87% 2.71% 2.68%
Yield On Advances (%) 10.42 9.84 10.68 10.78 10.91 Provisions 0.54% 0.66% 0.90% 0.65% 0.64%
Yield On Investment (%) 7.03 6.90 6.77 6.75 6.75 Provisions For NPAs 0.35% 0.47% 0.53% 0.54% 0.56%
Cost Of Funds (%) 6.33 5.58 6.01 6.15 6.77 Tax 0.54% 0.60% 0.61% 0.63% 0.65%
Cost Of Deposits (%) 6.65 5.96 6.21 6.41 6.54 ROAA 1.02% 1.15% 1.22% 1.31% 1.34%
Core Spread (%) 4.09 4.27 4.66 4.63 4.13 Leverage (x) 11.99 10.03 9.99 9.52 9.47
NIM (%) 3.02 3.48 3.90 3.90 3.95 ROAE 12.18% 11.53% 12.18% 12.46% 12.71%
OPERATING EFFICIENCY Source: Bank, HDFC sec Inst Research
Cost/Avg. Asset Ratio (%) 2.41 2.72 2.87 2.71 2.68
Core Cost-Income Ratio (%) 56.86 56.35 52.46 52.07 51.30
BALANCE SHEET STRUCTURE
Loan Growth (%) 38.7 36.7 34.9 33.7 33.3
Deposit Growth (%) 42.1 26.9 33.0 32.6 31.5
C/D Ratio (%) 85.1 91.7 93.0 93.8 95.1
Equity/Assets (%) 8.9 10.8 9.4 11.3 9.9
Equity/Advances (%) 14.7 16.6 13.9 16.6 13.8
CASA (%) 22.0 24.3 25.0 25.2 25.5
Capital Adequacy Ratio (CAR, %) 13.7 15.3 13.5 15.9 13.9
W/w Tier I CAR (%) 11.4 13.6 12.1 14.9 13.0

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 RBL BANK : RESULTS REVIEW 4QFY19

RECOMMENDATION HISTORY
Date CMP Reco Target
RBL Bank TP
23-Apr-18 506 BUY 573
850
28-Apr-18 536 BUY 582
800
6-Jul-18 564 BUY 582
750
20-Jul-18 556 BUY 584
700
9-Oct-18 495 BUY 623
650
23-Oct-18 465 BUY 618
600
8-Jan-19 574 BUY 638
550
9-Apr-19 659 BUY 768
500
19-Apr-19 675 BUY 803
450
400 Rating Definitions
Sep-18

Feb-19
Nov-18
Jun-18
May-18

Dec-18

Mar-19
Oct-18
Aug-18
Apr-18

Apr-19
Jan-19
Jul-18

BUY : Where the stock is expected to deliver more than 10% returns over the next 12 month period
NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period
SELL : Where the stock is expected to deliver less than (-)10% returns over the next 12 month period

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 RBL BANK : RESULTS REVIEW 4QFY19

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 RBL BANK : RESULTS REVIEW 4QFY19

HDFC securities
Institutional Equities
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Senapati Bapat Marg, Lower Parel, Mumbai - 400 013
Board : +91-22-6171 7330 www.hdfcsec.com

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