Shares of Equitas Small Finance Bank (SFB) dipped 11 per cent to Rs 52.75 on the BSE in Friday’s trade in an otherwise strong market after P N Vasudevan resigned as the managing director and chief executive officer (MD & CEO) of the bank for a career in health and education. He, however, has not set a date for his exit.
At 12:44 pm; the S&P BSE Sensex was up 2.3 per cent at 53,983. Meanwhile, the stock of holding company, Equitas Holdings traded 6 per cent lower at Rs 108.50, after hitting an intra-day low of Rs 103 on the BSE.
“The board of directors of the Bank in its meeting held today (May 19, 2022) has taken the letter received from Mr P N Vasudevan, MD & CEO of the Bank on record and wishes to place on record its deep appreciation of the contribution made by Mr Vasudevan over the years,” Equitas SFB said in an exchange filing.
He now wants to pursue a distinct set of goals, which he believes, will help him contribute further back to society, more than what he is doing now, the bank said. CLICK HERE FOR DETAILS
Vasudevan is the founder of Equitas. Equitas began its journey in 2007 starting off as a Micro Finance Institution and later converting into the Bank in 2016. Vasudevan said he would continue in his post till the succession and transition process is completed. The bank would form a search committee soon to identify his successor.
Earlier this month, the Reserve Bank of India (RBI) approved the amalgamation scheme between Equitas Holdings and Equitas SFB, subject to certain conditions.
In March 2022, the board of Equitas SFB had approved a new scheme of amalgamation between Equitas SFB and the promoter/holding company, Equitas Holdings, mainly to meet the promoter holding norms in Equitas SFB. The bank has to get the National Company Law Tribunal’s approval for the scheme of amalgamation and submit the same to RBI.
Overall, Equitas SFB has done very well on the liability front while diversifying its asset base away from MFIs. However, since its asset quality has weakened due to the Covid-induced shock, Equitas SFB needs to focus on improving the portfolio quality/mix as well as building better provisioning buffers. We believe that once the merger is completed, Equitas SFB will apply for a universal banking licence, which should be long-term positive for Equitas SFB, analysts at Emkay Global Financial Services had said in company update.
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