BoM Q2 net profit doubles, writes-off Srei's Rs 550-cr exposure

The bank's asset quality profile showed an improvement with gross NPAs declining to 5.56%

Bank of Maharashtra (BoM) posted 102.7 per cent rise, on year-on-year (Y-o-Y) - in net profit at Rs 264 crore in second quarter ended September 2021 (Q2FY22) on robust interest and fee income. It had posted a net profit of Rs 130 crore in Q2FY21.

Its Net Interest Income (NII) grew by 33.84 per cent on Y-o-Y basis to Rs 1,500 crore in Q2FY22 as against Rs 1,120 crore for Q2FY21.

The non-Interest income was up 22.61 per cent (on  Y-o-Y basis) to Rs 493 crore in Q2FY22. This includes recoveries worth Rs 260 crore from exposure to housing finance DHFL, an entity bought by Piramal Enterprises.

Its deposits rose by 14.47 per cent on Y-o-Y basis to Rs  1,81,572 crore in Q2FY22 and Gross Advances grew by 11.44 per cent on Y-o-Y basis to Rs 1,15,236 crore in Q2FY22 from Rs 1,03,408 crore in Q2FY21.

Its asset quality profile showed an improvement with gross non-performing assets (NPAs) declining to 5.56 per cent in September 2021 from 8.81 per cent in September 2020.

A S Rajeev, its managing director and chief executive said, the bank has written-off bad loans worth Rs 1,100 crore including Rs 550 crore exposure to two SREI finance companies after making full provisions. RBI has taken SREI Infrastructure Finance and Equipment leasing company to bankruptcy court for resolution.

The net NPA reduced to 1.73 per cent in September 2021 from 3.30 per cent a year ago. Its provision Coverage ratio improved to 92.38 per cent at end of Q2FY22 from 87.15 per cent at end of Q2FY21. 

Bank held cumulative Covid-19 provision of Rs 973 crore as on September 30 2021.

Bank’s Capital Adequacy Ratio (CAR) stood at 14.67 per cent with Common Equity Tier 1 ratio of 11.38 per cent for Q2FY22. Additionally, the bank has raised Rs 1,000 crore in capital through tier II bonds this week. This will increase CAR to about 15 per cent, Rajeev said.

Bank is likely to visit the capital market in the fourth quarter of current fiscal (Q2FY22) or first quarter of the next financial year (Q1FY22) with equity share offering – Qualified Institutional Placement or Follow-on Public offer – to reduce government holding in the bank.