By Aditya Raghunath
Investing.com -- A slew of senior-level exits at AU Small Finance Bank Ltd (NS: AUFI ) has spooked markets. The share price of the bank has dropped almost 16% in the last five trading sessions. AU Small Finance Bank closed September 1 at Rs 1,152.55 from Rs 1,353.3 on August 26.
Sumit Dhir, head of internal audit, has put in his papers but the bank is negotiating with him. Dhir resigned “expressing his desire to move back to his hometown Delhi due to changes in his personal circumstances following COVID-19 second wave.”
Dhir was appointed to replace Nitin Gupta who left the company four months back. Similarly, Chief Risk Officer Alok Gupta also resigned recently.
These exits have raised doubts on the bank’s loan book and markets have been wondering if the bank’s asset quality has been hit.
Bank management has said that the resignations are all for personal reasons and that the bank’s asset quality has improved in recent months. A note by Emkay Global on September 1 said, “We believe the resignations in audit/risk functions may raise investor concerns about the sanctity of the books/ risk management practices. However, management has tried to allay such concerns and indicated that there were no red flags by the RBI in its recently completed audit.”
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