India's Bandhan Bank surges 10% on cenbank nod for Partha Sengupta as CEO

Bandhan Bank

11/10/2024 06:41

Oct 11 (Reuters) - Shares of private lender Bandhan Bank
 BANH.NS  rose about 10% on Friday after India's central bank
approved the appointment of its new CEO, which analysts said
would ensure management stability.
    The Reserve Bank of India on Thursday approved the
appointment of Partha Pratim Sengupta as CEO and managing
director of the bank. He will replace Chandra Shekhar Ghosh, who
retired in July.
    Sengupta previously held leadership positions at the State
Bank of India  SBI.NS  and was CEO and managing director at
state-run Indian Overseas Bank  IOBK.NS  between 2020 and 2022.
    Bandhan Bank's shares rose as much as 9.5% to 205.55 rupees,
and were last up 9%.
    "Appointment of a PSU banker as CEO provides some stability
to an organisation like Bandhan which has witnessed exits in the
past year," Macquarie analyst Suresh Ganapathy said in a note.
    Separately, the bank said the National Credit Guarantee
Trustee Company had completed an audit of loan claims filed by
the lender under a guarantee scheme. Post the completion, the
remaining claims payout to the bank stood at 3.15 billion rupees
($37.5 million).
    The decision provides credibility to the bank, which may use
the funds to build provisions for stress loans, adding to its
capital base and earnings, Jefferies said in a note.
    "We believe the conclusion of the audit, with a relatively
clean chit for the bank, will be a breather for the street,"
CLSA said.
    Macquarie said it believes claims payout implies a 15%
upside to its estimate for the bank's fiscal year 2025 profit,
which is currently at 35 billion rupees.
    Bandhan Bank, which had seen high bad loan formation over
the past two years, said its asset quality degraded with gross
non-performing assets ratio rising to 4.23% at the end of June
from 3.84% three months earlier.
    Its shares have lost about 15% so far this year, compared to
about a 7% rise in the broader Nifty bank index  .NSEBANK .

($1 = 83.9775 Indian rupees)

 (Reporting by Dimpal Gulwani and Siddhi Nayak; Editing by Varun
H K)
 ((Dimpal.Gulwani@thomsonreuters.com;))