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Shares of Bandhan Bank Ltd jumped as much as 4.4 per cent to Rs 639.70, their biggest intraday percentage gain in over five weeks.
According to a media report, the Kolkata-based private-sector lender has backed out of the race to buy PNB Housing Finance Ltd. Canadian Pension Plan Investment Board and KKR were among those who didn't submit initial bids for PNB Housing Finance, the report said citing sources.
Bandhan Bank and PNB Housing Finance did not immediately respond to Reuters' request for comment.
Housing finance is a low-margin business and PNB Housing Finance has one of the lowest NIMs in the sector, while Bandhan has among the highest, says AK Prabhakar, head of research at IDBI Capital.
“If Bandhan grows on its own organically that will be better than acquiring PNB housing finance, as the acquisition will dilute their margins,”’ Prabhakar says’.
At the end of June quarter, Bandhan had an net interest margin of 10.27 per cent, while PNB Housing had it at 2.74 per cent.
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