Bandhan Bank tanks 9% after CEO decides to step down

Shares of Bandhan Bank tanked 9 percent in the opening trade on April 8 following chief executive officer and managing director Chandra Shekhar Ghosh's decision to step down.

At 9.36 am, shares of Bandhan Bank were trading at Rs 183.95 on the NSE.

The lender announced that Ghosh would quit upon the completion of his tenure in early July. In an exclusive interview to Moneycontrol, Ghosh said his decision to step down was voluntary and the bank had already begun the search for a new CEO.

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The CEO's decision to quits did not go down well with brokerage Jefferies, which warned of uncertainty surrounding the appointment of his successor. The uncertainty can result in slower growth and higher credit costs, the brokerage said. The company also highlighted the significance of an efficient succession plan, particularly noting that many top executives were relatively recent additions to the bank.

Jefferies slashed its price target for the stock by over 41 percent to Rs 170, saying the resignation as an unexpected surprise. The new price target reflects a downside potential of over 14 percent from the stock's previous close.

Ghosh, with more than 30 years of experience in microfinance and development, is set to retire on July 9 despite the board approving his reappointment as the MD & CEO for another three years in November.

In his resignation letter, which was included in the lender's regulatory filing, Ghosh said he would pursue a broader strategic role within the group.

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