Bandhan Bank stock slumps 7% to 2-month low on Q1 update, CFO resignation
Bandhan Bank slumped nearly 7% to hit their lowest level in over two months on Wednesday following the news of the resignation of chief financial officer Sunil Samdani. Besides, the provisional quarterly update shared by the lender showed a sequential decline in the loan book for the quarter ended June. Shares of the bank hit a low of Rs 216.10 on the National Stock Exchange in early trade, but were trading slightly off lows at Rs 221.85, with a cut of 4%.
The selling came on the back of significant volumes of more than 30 million shares. This is more than 4 times the six-month average trading volume of 7.5 million shares. In the derivatives segment, significant build-up of short positions was visible as the July futures contract of the stock saw a 12% rise in open interest.
Premiums in the out-of-the-money put options surged, suggesting there is more downside risk for the scrip. Samdani has been serving as its CFO since Bandhan Bank received the banking licence and commenced operations in 2015. Unlike its peers, Bandhan Bank has been an underperformer given lower-than-industry growth and asset quality issues.
In the last one year, the stock has lost about 19%, whereas the sectoral index Nifty Bank has gained 34%. The private sector lender has been struggling with rising bad loans at a time when most of its peers, including the public sector ones, have shown sharp improvement in asset quality. Gross advances in the June quarter grew a mere 7% YoY but declined sequentially by 5.5% to Rs 1.03 trillion.
Most of its peers across private and public sector space have seen double-digit growth in advances. The CASA deposits declined 8% sequentially, while term deposits grew 6%. CASA ratio, thus, declined ~330 bps sequentially to
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