India's Federal Bank hits record high as cenbank clears KVS Manian as new CEO

Federal Bank

23/07/2024 04:57

BENGALURU, July 23 (Reuters) - Shares of India's Federal
Bank  FED.NS  rose as much as 5.5% to a record high on Tuesday,
a day after the central bank approved the appointment of veteran
banker KVS Manian as the lender's new CEO, quashing concerns
around management succession.
    Manian resigned from Kotak Mahindra Bank  KTKM.NS  in April,
after nearly three decades at the bank, saying he had
aspirations elsewhere in the industry, and local media has said
he was being considered for the CEO role at Federal Bank.
    The Reserve Bank of India (RBI) approved Manian's
appointment as Federal Bank's managing director and CEO for
three years, the lender said on Monday.
    "We view this development as positive as it also brings an
end to the uncertainty around management succession," Nomura
analysts said in a note.
    "Manian has a strong banking pedigree and diverse experience
across financial services and his leadership can potentially aid
Federal Bank's growth and profitability outlook over the medium
term."
    At Kotak, Manian oversaw corporate banking, commercial
banking, private banking and the asset reconstruction business
among others.
    In terms of experience, Manian's background "ticks most of
the key boxes that investors would look for in a bank CEO," Yes
Securities said in a note.
    Federal Bank had begun a search for a new CEO in January
after the Reserve Bank of India rejected extending CEO Shyam
Srinivasan's three-year term, which ends in September.
    The average rating of the 30 analysts covering Federal Bank
is the equivalent of "buy," as per LSEG data.
    The company's stock has jumped 27% so far this year, the
most among the 10 members in Nifty private bank index
 .NIFPVTBNK , which is up about 5%.

 (Reporting by Sethuraman NR in Bengaluru; Editing by Savio
D'Souza)
 ((Sethuraman.NR@thomsonreuters.com; (+91 9945291420); Reuters
Messaging: nallur.sethuraman.thomsonreuters.com@reuters.net))