Bank of Maharashtra reports 117 per cent jump in Q1 profit at ₹452 crore

AS Rajeev, MD & CEO  | Photo Credit: Visveswaran V@Chennai

Mumbai, July 18

Bank of Maharashtra (BoM) reported a 117 per cent year-on-year (yoy) jump in standalone net profit at ₹452 crore in the first quarter on the back of increase in net interest income, decline in operating expenses and writeback in provisions for standard/ restructured assets.

The Pune-headquartered public sector bank had reported a net profit of ₹208 crore in the year-ago quarter

Net interest income (difference between interest earned and interest expended) was up 20 per cent yoy at ₹1,686 crore (₹1,406 crore in the year-ago quarter).

However, the non-interest income (comprising fee-based income, treasury income and miscellaneous income) dipped 54 per cent yoy to ₹317 crore (₹687 crore) due to bond yields going up during the reporting quarter, .

Operating expenses, comprising employee expenses and other operating expenses, declined 19 per cent yoy to ₹801 crore (₹987 crore).

Gross non-performing assets (GNPAs) (taking into account reduction of ₹798 crore and addition of ₹730 crore) declined by ₹68 crore during the quarter to ₹5,259 crore as at June-end 2022.

GNPA position improved to 3.74 per cent of gross advances against as at June-end 2022 against 3.94 per cent as at March-end 2022. Net NPA position too improved to 0.88 per cent against 0.97 per cent.

₹257-cr writeback

Loan loss provisions increased by 27 per cent yoy to ₹637 crore (₹501 crore). The bank received a writeback of ₹257 crore (against a provision of ₹257 crore in the year-ago period). Provision for non-performing investments jumped to ₹186 crore (nil).

AS Rajeev, MD & CEO, observed that there was considerable improvement in the bank’s asset quality, with special mention accounts (accounts showing signs of incipient stress) declining to 0.40 per cent of total advances as of June-end 2022 against 0.80 per cent as of March-end 2022.

He said the bank’s net NPAs ratio is almost zero considering that it holds Covid-19 pandemic related provisions of ₹1,200 crore and the capital adequacy ratio is at 16.50 per cent while the net NPAs in absolute terms are at ₹1,206 crore.

Gross advances were up by 27.10 per cent yoy to ₹1,40,561 crore. The loans portfolio expanded on the back of 33.75 per cent increase in corporate (mainly mid-corporate) advances and 22.68 per cent growth in retail, MSME and agriculture advances.

Total deposits rose by 12.34 per cent yoy to ₹1,95,909 crore. Low-cost current account, savings account (CASA) accounted for 56.08 per cent of total deposits (53.04 per cent as at June-end 2021 and 57.85 per cent as at March-end 2022).

Rajeev said the bank has set credit and deposit growth targets of 20-22 per cent and 12-14 per cent, respectively, for FY23.

BoM is seeking to improve its credit-deposit ratio from 72 per cent now to over 75 per cent as excess statutory liquidity ratio (SLR) securities of ₹10,000-12,000 crore can be moved towards credit.

The Bank has shortlisted three accounts aggregating Rs 660 crore for transfer to the National Asset Reconstruction Company Ltd. The process of transfer has already started.

Overall, BoM is eyeing recoveries of about Rs 3,000 crore in FY23, including via NARCL route and resolution of big accounts such as IL&FS, Religare and SREI.

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