Bandhan Bank Up 9% On RBI Nod To Appoint Partha Pratim Sengupta As MD & CEO

3 min read Last Updated : Oct 11 2024 | 10:16 AM IST

Bandhan Bank share price surged 9 per cent to Rs 204.90 on the BSE in Friday’s intraday trade after the private sector lender received approval from the Reserve Bank of India (RBI) for the appointment of Partha Pratim Sengupta as Managing Director and Chief Executive Officer (MD & CEO) for a three-year term, w.e.f. November 10, 2024.

“The Bank has received the acceptance of Sengupta on October 9, 2024 and subsequent confirmation on October 10, 2024 that he will step down from his other engagements in compliance with the terms and conditions of the prior approval for the proposed appointment as MD&CEO of the bank,” the exchange notification said.

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Partha Pratim Sengupta has nearly 40 years of banking experience, with leadership roles at State Bank of India (SBI), and Indian Overseas Bank. He has worked in areas focusing on retail, corporate banking, and technology driven growth. Appointment of his leadership puts an end to the ambiguity, thereby expected to aid valuation,” ICICI Securities said in a note.

In April this year, Bandhan Bank founder Chandra Shekhar Ghosh, who was the MD & CEO, decided to hang up his boots by announcing a surprise retirement. Ratan Kumar Kesh, one of the executive directors, was appointed the interim CEO.

Meanwhile, thus far in the calendar year 2024, Bandhan Bank share price has underperformed the market by falling 17 per cent as compared to 13 per cent rally in the BSE Sensex. The stock had hit a 52-week high of Rs 263.15 on January 4, 2024.

Bandhan Bank has its headquarters in Kolkata and follows the group-based individual lending model for the microfinance business. As on June 30, 2024, Bandhan Bank had a network of 6,297 branches, banking units or doorstep service centres (DSCs) and GRUH centres, spread across 35 states and Union Territories (UTs).

On October 1, 2024, rating agency ICRA downgraded the long-term ratings of Bandhan Bank. The downgrade, it said, reflected the sustained weakness in the emerging entrepreneur business (EEB) portfolio, which is likely to continue, given the concerns regarding borrower-level overleveraging in the sector.

“The bank’s profitability gets impacted by the absence of income from sale of priority sector lending certificates (PSLC) and continuing balances in the low-yielding Rural Infrastructure Development Fund (RIDF) deposits, though the same would mature in the coming years,” it said.

ICRA added: The rating also takes note of the senior management exits in the bank in the recent past along with the appointment of a nominee director by the RBI to oversee the management transition on the board in June 2024, though at the same time there has been strengthening of the senior management team.

Bandhan’s net stress book has also witnessed moderation. However, the sufficiency of provisions on the same will depend on the timely completion of the ongoing audit by the National Credit Guarantee Trustee Company Ltd (NCGTC) and the receipt of claims against these stressed loans under various schemes of the Government, ICRA said.

First Published: Oct 11 2024 | 10:02 AM IST