Bandhan Bank’s CEO & Managing Director CS Ghosh Resigns: Uncertainty Looms Amid Renewal Limbo

The unexpected resignation of Bandhan Bank’s Managing Director and CEO, CS Ghosh, has stirred unease among investors, especially given the pending renewal of his tenure. Kotak Institutional Equities highlights the anxiety surrounding Ghosh’s abrupt departure, noting similarities with past instances in the banking sector, such as YES Bank Ltd, RBL Bank Ltd, Ujjivan SFB, and South Indian Bank. While outcomes in previous cases varied, Kotak emphasizes the discomfort stemming from the timing of Ghosh’s exit, particularly with RBI approval for renewal pending.

Concerns are exacerbated by lingering asset-quality issues post-Covid and ongoing independent investigations into claims made by the bank. Ghosh’s expressed interest in a broader role within the group adds complexity to the situation, arriving at a challenging juncture as the bank strives to address asset quality and stabilize senior management.

Despite the setback, Kotak maintains a positive outlook on Bandhan Bank but anticipates a potential de-rating from current levels due to the unfolding circumstances. Investors await clarity over the coming quarters regarding the new appointment and ensuing changes. For the time being, Kotak retains a ‘BUY’ rating on the stock, acknowledging the need for vigilance amid evolving developments within the bank.

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