Bandhan Bank shares fall 2% as Sensex scales 78,000 for the first time
bank move as administrative in nature to ensure a smooth leadership transition in the Kolkata-based lender, but concerns over Bandhan Bank's asset quality perhaps kept investors anxious. The stock price closed lower at Rs 203.70 on BSE Tuesday, about 16% fall from Rs 242 seen on the first trading day of the year.
«While the market may fear that there could be more skeletons in the closet — in terms of further increase in the stress pool — we believe this (appointment of additional director) is more of a prudent measure exercised by the RBI,» said Suresh Ganapathy, managing director and head of financial services Research at Macquarie Capital.
Bandhan Bank was carrying a stressed asset pool of Rs 4,700 crore or 3.8% of total loans, out of which Rs 4,100 crore was on account of the bank's flagship lending to the bottom of the pyramid borrowers.
The bank had reported a 93% drop in fourth quarter net profit due to 141% provisions. The private sector lender had written off bad loans to the tune of Rs 3,852 crore in the quarter to cleanse balance sheet, helping gross non-performing assets ratio improve to 3.84% at the end of the fiscal as compared with 4.87% a year back.
«The bank's asset quality stress has largely been addressed now. We don't expect any major disruption on that aspect. Therefore, we see the RBI move as a pre-emptive one to ensure a smooth leadership transition, given the fact that the top management team is fairly new to the bank,» said Nitin Aggarwal, head of BFSI, institutional equities at Motilal
