Mumbai: The shares of Axis Bank soared over 5 per cent on Tuesday and remained the biggest gainer among the Sensex constituents following the board’s decision to end the term of its CEO Shikha Sharma by the end of this year. While the bank is yet to identify a new CEO, market experts believe that a change in top management would be positive for the bank in the long term.
The shares of Axis Bank closed the session at Rs 546, up 28 points or 5.43 per cent on the BSE.
“The bank’s key challenge has been its asset quality which has consistently worsened in recent years largely led by its corporate loan portfolio. While the board has not identified a successor just yet, we expect the bank to continue its journey towards de-risking the business by strengthening the liability franchise and increasing the share of retail and better-rated corporates,” said Kotak Institutional Equities.
Analysts at Macquarie Capital Securities added that the management transition needs to be managed well, failing which there could be near term challenges to operations and growth. “We believe the appointment of a credible successor will be critical for the bank’s performance hereon,” it said.
