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RBL Bank close to tying up $100-million tier-II funding

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The lender’s capital to risk-weighted assets ratio (CRAR) stood at 16.8% as on March 31, 2022, down from 17.5% a year ago. The common equity tier-1 (CET-1) ratio stood at 16.2% at the end of FY22. The average liquidity coverage ratio for Q4FY22 was 138%.

RBL Bank on Thursday said it is close to tying up tier-II funding worth $100 million in the next few days. The fund-raise will improve the bank’s capital ratio by approximately 1%.

The lender’s capital to risk-weighted assets ratio (CRAR) stood at 16.8% as on March 31, 2022, down from 17.5% a year ago. The common equity tier-1 (CET-1) ratio stood at 16.2% at the end of FY22. The average liquidity coverage ratio for Q4FY22 was 138%.

With this new tier-2, we’ll be close to 18%, and do not envisage any need for further capital in this financial year,” said Rajeev Ahuja, interim MD & CEO. The fund-raising will be in the form of a private placement with an international fund, the management said.

The bank’s advances growth was muted at 2% year-on-year (y-o-y) and the loan book stood at Rs 60,022 crore, with the retail book shrinking 9%.

On advances, our retail engines are now coming back to normalcy after the second wave of Covid. We expect growth in retail to be in the mid-to-high twenties this fiscal,” Ahuja said. The growth will come not just from cards and microfinance, but also from housing, rural and vehicle finance, beginning with used-car financing, he added.

RBL Bank is expecting long-term balance sheet growth to range between the high teens and 20%, which will also help build better-quality assets.

After former chief executive Vishwavir Ahuja’s sudden exit in December 2021 and the appointment of a Reserve Bank of India nominee director on its board, RBL Bank had suffered a flight of deposits. Most of those problems have stabilised, the bank said. “We started stabilising our deposits by end-January. Since then, we have not only added to the aggregate deposits, but also kept improving the retail composition,” Ahuja said.

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