Bandhan Bank share up 10.3% on P.P. Sengupta's appointment as MD & CEO

Private sector lender Bandhan Bank saw its share surging 10.3% today after the RBI approved the appointment of Partha Pratim Sengupta as the managing director and chief executive officer. "The RBI, vide its letter dated October 08, 2024, has granted its prior approval for the appointment of Mr. Partha Pratim Sengupta as Managing Director & Chief Executive Officer (‘MD&CEO’) of the Bank, for three years with effect from the date of taking charge, which shall not be later than November 10, 2024," says the bank.

The bank received the acceptance of Sengupta on October 9 and confirmation on October 10 that he would step down from his other engagements as per the rules. Sengupta's appointment proposal will be placed before the nomination and remuneration committee and the board.

An experienced banker with nearly four decades of experience in banking, Sengupta has worked in different geographies, across both retail and corporate banking, says the lender. He has previously worked at the State Bank of India (SBI), where he rose to the position of deputy MD and chief credit officer. He then took over as MD & CEO of Indian Overseas Bank (IOB). Bandhan Bank says in both his stints, he leveraged technology and innovation to achieve business results.

Sengupta has spent his career in a range of retail and corporate branches and businesses. His postings included branch manager roles at retail and commercial branches, forex, trade finance and credit officer roles, regional manager, deputy general manager in the corporate centre internet banking department, general manager mid-corporate, etc.

In 2020, Sengupta was selected as MD and CEO of Indian Overseas Bank and led the bank until December 2022. He graduated in physics honours and is also a C.A. from the Indian Institute of Bankers. He has received training in Leadership Development from Harvard Business School, IIM Calcutta, and ISB Hyderabad.

Bandhan Bank's profit for the quarter ended June 30, 2024, stood at ₹1,063 crore compared to ₹721 crore, registering a growth of 47% YoY. The bank’s RoA (return on assets) stood at 2.5% and RoE (return on equity) was 18.8% on an annualised basis. The net interest income (NII) came in at ₹3,005 crore compared to ₹2,491 crore as of Q1 FY24, a growth of 21%, while the net interest margin rose 7.6% year-on-year. The bank’s net revenue came in at ₹3,533 crore vs ₹2,876 crore in Q1 FY24, a growth of 23%.

The bank's share, meanwhile, hit the day's high of ₹209.50 on BSE today after a gap-up opening. At the current share price of ₹205.75, the scrip is trading 21.7% lower than the 52-week high of ₹263.15 touched on January 4, 2024, and its m-cap stands at ₹33,145.73 crore. Bandhan Bank shares have seen 17.26% fall, while its year-to-date fall stands at 15.61%. On a six-month and one-month basis, the scrip saw 12.54% and 5.22% rise, respectively.

Kotak Institutional Securities, in its September 12 report, gave a "BUY" rating on the stock, with its fair value estimated at ₹250. The brokerage says the bank is "de-risking the franchise through loan diversification and prudent risk policies is actively underway, its business momentum is healthy across segments, is comfortable with the MFI book trends despite headwinds for industry players, and its CET-1 position is still comfortable".