September 14, 2018 / 5:06 AM / a year ago

BUZZ-India's Bandhan Bank rises; co backs out of race to buy PNB Housing - report

** Shares in Bandhan Bank Ltd rise as much as 4.4 pct to 639.70 rupees, biggest intraday pct gain in over five weeks

** Kolkata-based private-sector lender has backed out of the race to buy PNB Housing Finance Ltd, the Economic Times reported late on Wednesday, citing sources

** Canadian Pension Plan Investment Board and KKR were among those who didn’t submit initial bids for PNB Housing Finance, the report said

** 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 qtr, Bandhan had an NIM of 10.27 pct, while PNB Housing had it at 2.74 pct

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