Bandhan Bank: Jefferies brokerage downgraded Bandhan Bank Ltd.’s rating from “buy” to “underperform” after the bank announced on April 5 that its Managing Director and CEO, Chandra Shekhar Ghosh, would step down Upon the conclusion of his service in early July.
The brokerage reduced the stock’s target price to Rs 170 from Rs 290, attributing the founder-CEO’s resignation as an unforeseen negative event. This adjusted target price signifies a 14 percent decrease from the bank’s closing price of Rs 197.40 on April 5.
Over the last six months, Bandhan Bank’s shares have dropped by almost 20 percent.
In an exclusive interview with Moneycontrol on April 8, Ghosh stated that his choice to resign was voluntary, and the bank has initiated the search for a new CEO. “I want to emphasize that this decision is voluntary. I’ve been contemplating retirement for almost a year and have now decided to take action,” Ghosh affirmed.
Jefferies voiced apprehensions regarding the uncertainty surrounding the selection of a new CEO, fearing it could lead to slower growth and increased credit costs. The brokerage stressed the significance of a seamless succession process, particularly noting that many senior management members are relatively recent additions to the bank.
With over 30 years of experience in microfinance and development, Ghosh, set to retire on July 9, had his reappointment as MD & CEO of the bank for three years approved by the board on November 24.
Bandhan Bank
In his resignation letter submitted with the regulatory filing, Ghosh stated his intention to step down from Bandhan Bank to assume a more expansive strategic role within the group.
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“In my capacity as MD & CEO for nearly a decade, with three consecutive tenures, I believe it is time for me to transition into a broader strategic role within the Bandhan group. Therefore, I have chosen to retire from my position at Bandhan Bank after my current tenure, effective July 09, 2024,” stated Ghosh in his resignation letter filed with regulators.
