Bandhan Bank Celebrates Gains in Share Price Thanks to New Leadership

After the appointment of Partha Pratim Sengupta as the new CEO, shares of India's Bandhan Bank recorded a significant increase of nearly 10 percent. The decision by India's central bank to hand over the reins to Sengupta is seen by analysts as an important step towards stabilizing management. Sengupta succeeds Chandra Shekhar Ghosh, who retired in July. Sengupta brings a wealth of experience: he held significant leadership positions at the State Bank of India and led the Indian Overseas Bank between 2020 and 2022. The share reached an intraday high of 9.5 percent and was last quoted at 205.55 rupees. Analyst Suresh Ganapathy from Macquarie stated that the appointment of an experienced PSU banker like Sengupta brings the necessary stability to Bandhan Bank, after the company was hit by departures in recent years. Furthermore, the bank reported that the National Credit Guarantee Trustee Company has completed an audit of the bank's credit claims. After the audit, the remaining payout amounts to 3.15 billion rupees. According to Jefferies, the bank's credibility is strengthened, along with contributing to the capital base increase by building reserves for problematic loans. A positive conclusion of the audit was seen by CLSA as a relief for the market. Macquarie also forecasts a potential profit increase of 15 percent for the fiscal year 2025, based on the payout of credit claims. Despite the rise, Bandhan Bank's stock has fallen by 15 percent since the beginning of the year, in contrast to the Nifty Bank Index, which has risen by 7 percent. The deterioration of asset quality remains a concern, with an increase in the gross NPL ratio to 4.23 percent at the end of June.