Hello,
I wouldn't mind to face a similar dilemma...
Is that intentional carving at the base of the hilt? (Looks like a slightly wider ring which might suggest that no typical ferrule ever was there.)
I'm not sure the clamp is original.
IMHO it is pretty certain that there would have been grip binding originally (if only to assure a positive grip). But I could imagine just adding 2 silver bands in similar width and okir than the still present final band. (This would also cover the majority of the chipped wood area.)
Regards,
Kai