Bandhan Bank tanks over 6% after CEO Ghosh steps down
Bandhan Bank fell more than 6% Monday after founder and chief executive, Chandra Shekhar Ghosh, announced a voluntary exit despite a board nod to continue in the top job.
Brokerages Jefferies and Nomura have slashed their target prices for the stock of the Kolkata-based lender that emerged as a full-service bank after decades of operations as a microfinancier.
The stock slid 6.21% to ₹185.1 on the NSE on Monday and has declined 24.17% so far in 2024. Jefferies has revised the price target for the bank to ₹170 from ₹290 and downgraded the share to 'underperform' after this announcement.
Nomura also slashed the target price to ₹175 from ₹275.
«The unanticipated resignation… triggered the fall in the stock,» said Shrikant Chouhan, head of equity research at Kotak Securities. «This development is an unexpected one and it has probably come at the wrong time, considering the bank is yet to fully recover from the asset quality issues.»
The bank had reported 7% gross non-performing assets in Q3FY24, which had raised concerns about its asset quality.
«Bandhan Bank has seen a couple of top-level resignations in the past year, including those of the CFO and CCO,» said Yuvraj Choudhary, research analyst at Anand Rathi Institutional Equities. «The company is faced with uncertainty in top management, along with higher stress in asset quality and an audit in its CGMFU (Credit Guarantee Fund for Micro Units) books.»
Choudhary added that finding a new chief executive by July, when Ghosh is set to retire and take a more
