Mumbai: After shares of RBL Bank Ltd ended 12.09% lower during the day due to speculations of insider trading, the company on Wednesday clarified that market transactions of shares by employees was a "routine activity". The stock closed at ₹313.65, down ₹43.15, or 12.09%, on the BSE.
In a statement to the exchanges, RBL Bank Ltd said market transactions by employees was a routine activity with regular exercise of ESOPs (employee stock ownership plans) and sale of equity shares thereafter.
“ESOPs exercised and sale of equity shares by employees for month of July 2019 is in line with past transactions. Further, no management committee member, including key managerial personnel, have sold any shares on 30 July 2019 and thereafter till date. The bank is committed to provide full transparency to all its stakeholders in line with the best practices of governance,” RBL Bank said in an official statement.
The total employee holding in the bank was around 3.46 crore shares as on 23 August, with over 25% of employees holding shares.
RBL Bank had a robust start to FY20 with net profit increasing 40.5%, overall business growth of 35.0% to ₹1.18 lakh crore and stable asset quality with gross NPAs unchanged on a sequential basis at 1.38% as on 30 June . However, the management’s indication of possible corporate slippages to the tune of ₹1,000 crore in the coming quarters, the bank’s exposure to Café Coffee Day and loans to NBFCs raised an alarm in the minds of investors, causing the bank's shares to tank.
The stock has been on a continuous decline due to multiple factors such as asset quality concerns. Shares of RBL Bank are down 45.57% so far this year. The stock hit an all-time high of ₹701.30 on 28 May and has since then it dropped 55.30%.
“The stress pool remains unchanged, excluding exposures to CCD, which the bank believes is unlikely to be impaired. There are no signs of unusual stress in the cards portfolio although some stress has been reported in the loan against property (LAP) book,” Emkay Global Financial Services Ltd said in a report on 27 August. Analysts at Emkay has reduced its earnings estimates by 13.4% and 5.5% and now expect return on asset (RoA) at 1% and 1.3% in FY20 and FY21, respectively, factoring in lower growth and higher non-performing assets (NPAs).
