Shares of IndusInd Bank moved higher by 5.1 per cent to Rs 1,378.55 on the BSE on Friday after the bank announced selection of a potential successor to Ramesh Sobti, the current Managing Director and Chief Executive Officer (MD & CEO). It, however, did not name the successor. Sobti's tenure will end in March 2020, when he turns 70.
“Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the bank, at its meeting held on Thursday, October 30, 2019, has finalised a potential candidate for the position of MD & CEO,". the bank said in a regulatory filing. READ FILING HERE
The bank further added: "As mandated under the extant RBI norms, the bank has submitted an application to the Reserve Bank of India (RBI), seeking approval for the appointment of the new MD & CEO of the bank".
According to a Business Standard report, the three names which are doing rounds for the corner-room are Sumant Kathpalia, the lender’s head of consumer banking, Paul Abraham, the current chief operating officer and Suhail Chander, head of corporate and commercial banking. READ REPORT HERE
In the past five-weeks, the stock of IndusInd Bank has underperformed the market by falling 15 per cent on concerns emerging from the bank’s exposure to a large housing finance company. In comparison, the S&P BSE Sensex was up 3 per cent during the same period till yesterday.
The bank, however, clarified that the exposure is fully/strongly collarteralised with no overdues. The group also maintains equal or higher amounts of unpledged fixed deposits with the bank, it added.
“We believe potential benefits from the Bharat Financial Inclusion merger on loan growth and ROE accretion are well priced in. We believe higher interest rates will exert some pressure on IndusInd Bank’s relatively nascent deposit franchise and loan growth in the CV book. Investors will also need to take a view on the strategy outlook beyond FY21 after Mr. Sobti’s retirement,” brokerge firm JP Morgan said in Q2FY20 result update. The firm has ‘neutral’ rating on IndusInd Bank with a Mar-20 price target of Rs 1,350.
At 11:15 am, IndusInd Bank was the largest gainer among S&P BSE Sensex, with a gain of 4 per cent at Rs 1,363 on the BSE. In comparison, the S&P BSE Sensex was trading 0.04 per cent lower at 40,114 points.