The RBL Bank share price reached the lowest record of RS 87.60 because it fell nearly 23 percent on BSE in the intra-day-to-day trade after the Bank of India (RBI) approved the appointment of Rramaniakumar R Subramaniakum as the Director of Implementing & Head of Ranik Executive (MD & CEO) from private sector lender. “… The Board of Directors’ Meeting will be held to approve the appointment of Mr. Subramaniakumar’s Mr.

Previously, Subramaniakumar was a former Executive Director and Executive Director of the Indian foreign bank managed by the government. He was also appointed as the administrator of the Ltd’s CO Housing Finance Council after the mortgage board was replaced. “Given his profile, he appeared as a problem solving with a decent success in IOB/DHFL. However, the election as MD & CEO of private bank, despite the temporary guarantee of the quality of assets and plans to change the orientation of the bank in the growth path, a little surprising, “Analysts said at the EMKAY broker in a note.

According to analysts in the Institutional Equities box, RBL Bank has discussed a concern, however, the problem of bank strategy given its dependence on product segments with high results, employee retention, and recovery in the ratio of returns and growth is still unclear. “We need to have clarity (1) loan mix construction. The bank’s main collection comes from credit cards and LKM businesses. Every change in this model will hurt short -term prospects for growth and profitability. (2) employee retention/recruitment strategy. Esops usually tend to play an important role in maintaining the talent and price performance of the bank RBL because the listing is not impressive. (3) ROE’s journey normalization can be longer. The road to ROE requires more clarity and there may be many changes that can occur in the next few years and the bank may need more time to reach ROE that is higher than the current level, “they said in a report dated June 13.

RBL Bank: Stock Price History

In the last six months, the market price of the bank has more than mashed (down 52 percent) to a 9 percent decline in S&P BSE Sensex. RBL Bank has faced many problems in recent years in the field of growth ranging from explosion of company books to the recent Covid impact on micro financial institutions (MFI) and card business.

What should investors do now?

“In the midst of uncertainty, we reduce the ranking of stocks to hold back from Buy, with a target price of RS 110 (RS 140 before). We hope that shares remain under pressure in the near future, because investors want to wait for a new management business strategy, including growth/quality growth of assets, “said the note.

Another leading broker, CLSA has reduced the RBL Bank ranking to outperform from Buy, with a target price of RS 130, hinting at an increase of 15 percent from the previous closure of RS 114.45. “Flux and leadership accountability are the main headwinds but lenders have the quality of asset that can be managed. “RBI has approved R Subramaniakumar as MD & the new CEO of the lender, regardless of a number of questions,” he said.