Global brokerage firms, including UBS and Macquarie, have maintained Buy on ICICI Bank after its MD and CEO Chanda Kochhar bowed out, six months before her current tenure was to end.UBS said Kochhars exit is a positive for the bank as stakeholders will focus on core banking business.
It raised target price for ICICI Bank to Rs 440 from Rs 410 earlier.
Loan book clean-up should contribute to improvement in earnings.
Core banking business and retail franchise are key to our buy thesis, UBS said.The scrip was 0.30 per cent down at Rs 315 at around 9.40 am while the benchmark Sensex came off 0.49 per cent to 34,995.The banks board accepted her plea for early retirement on Thursday, elevating COO Sandeep Bakhshi to the CEO's role for five years.
Since June, Bakhshi was acting as the de-facto CEO after Kochhar was sent on leave, pending an independent probe into allegations of conflict of interest in awarding loans to the Videocon group.Macquarie maintained Outperform rating for ICICI Bank with a target price of Rs 416.
Chanda Kochhar's resignation removes a major overhang.
We dont expect any challenges by RBI on Sandeep Bakhshis appointment as CEO.
Return on equity should improve due to falling credit costs, Macquarie said.
The global brokerage also expects the stock to rerate.
Mahesh Singhi, founder and MD, Singhi Advisors, said, "At a time when the market sentiment is at an all-time low and banks are facing the brunt of NPAs on their balancesheets, the exit of Chanda Kochhar will be key to reinstating the credibility of ICICI Bank.
The move will restore investor confidence in the bank.
She has taken a most dignified and graceful exit which will ensure the investigation will proceed in a smooth and transparent manner."