Newsbreak Confirmed: Dubai's State-Owned Bank To Buy RBL Stake For Rs 26,853 Crore

RBL Bank Ltd. approved raising up to Rs 26,853 crore via a primary stake sale to Dubai's state-owned lender Emirates NBD Bank, according to a regulatory filing on Saturday.

RBL Bank will sell 95.9 crore shares to Emirates NBD at Rs 280 each, which marks nearly a 7% discount to the stock's previous closing price. The fund infusion will result in a stake acquisition equivalent to 60% of the post preferential equity share capital of the bank. The India branch of Emirates NBD will be merged with RBL Bank following the fundraise.

NDTV Profit had reported on Oct. 13 that Emirates was set to buy a controlling stake in the Mumbai-based private bank for approximately $3 billion.

The preferential issue has also triggered an obligation on Emirates NBD to make an open offer to the shareholders of the bank as per market regulations.

As a consideration for the proposed amalgamation, Emirates NBD will be allotted around 8.7 crore shares of the Bank at a face value of Rs 10, the filing added.

The deal is pending regulatory approvals from the Reserve Bank of India, the Department for Promotion of Industry and Internal Trade, the Cabinet Committee on Economic Affairs and the Competition Commission of India.

Emirates NBD is unlikely to change the management at RBL Bank, people aware of the matter told NDTV Profit on the condition of anonymity. A majority of management members are expected to continue in their roles, and RBL Bank will continue to take strategic calls with inputs from new owner post the transaction, the people explained. They also added that Emirates NBD will have board representation following the fund infusion.

RBL Bank, formerly known as The Ratnakar Bank Ltd, is a private sector lender established in 1943. Originally established as a regional bank in Maharashtra, RBL Bank became a private sector lender in 1970. It, however, remained a closely owned small lender, largely limited to Maharashtra.

In 2010, Bank of America ex-banker Vishwavir Ahuja took over as MD and CEO. In 2014, Ahuja renamed the lender to RBL Bank to make it a national private bank. In December 2021, Ahuja stepped down suddenly, before his tenure ended. The regulator appointed a director on the board to monitor the transition at the lender.

While his deputy Rajeev Ahuja continued to run the bank as interim MD and CEO for a few months after, RBI later appointed K Subramaniakumar as the leader in June 2022.

The firm, on Saturday, also reported a 4% year-on-year decline in net interest income which came down to Rs 1,551 crore in the September quarter from Rs 1615 crore in the same period the previous fiscal. The bank also reported a 20% decline in net profit, which fell to Rs 178 crore from the previous year's Rs 222 crore.

• Profit down 20% to Rs 178 crore versus Rs 222 crore (YoY).

• Net interest income down 4% to Rs 1551 crore from Rs 1,615 crore (YoY).

• Gross NPA ratio down 46 basis points to 2.32% vs 2.78% (QoQ).

• Net NPA ratio up 12 basis points to 0.57% versus 0.45% (QoQ).