Bank of Maharashtra net soars 248% on higher margin,recoveries

State-run lender Bank of Maharashtra today reported a 248 per cent jump in net profit at Rs 162.91 crore in the September quarter on account of higher margin and improvement in cash recoveries.
The state run lender's net profit in the corresponding July-September quarter of the previous fiscal stood at Rs 46.85 crore.
"We have had a significant improvement on yield on advances, reduction in deposit cost and we have also had improved investment yields. These have resulted in net interest margins and return on assets," bank chairman and managing director S Muhnot told reporters here today.
Net interest margins grew to 2.90 per cent from 2.69 per cent in the year-ago period, while return on assets improved to 0.48 per cent from 0.14 per cent and yield on advances rose to 11.28 per cent from 11.05 per cent and yield from investments rose to 7.88 per cent from 7.79 per cent.

The bank was able to bring down its cost of funds to 6.47 per cent in the period from 6.58 per cent last year.
However, its asset quality worsened with gross non-performing assets soaring to 4.83 per cent from 2.77 per cent, while net NPAs nearly doubled to 3.29 per cent from 1.76 per cent.

Fresh slippages rose to Rs 1,277 crore as against Rs 1,206 crore last year. "Going forward, we expect slippages to reduce on higher recoveries and upgrades," Muhnot said.
Cash recoveries in the quarter jumped to Rs 218 crore from Rs 89 crore, while the bank upgraded Rs 426 crore of loan as against Rs 119 crore in the year ago period. The Pune-based lender wrote off Rs 52.21 crore of loans during the quarter.

Recoveries in the quarter stood at Rs 590 crore and the bank expects a similar amount of recoveries in pipeline.
Total deposits increased to Rs 1,17,452 crore from Rs 1,17,293 crore last year, while advances increased from Rs 88,419 crore to Rs 90,119 crore.
Muhnot said the bank has asked for Rs 1,100 crore in capital infusion from the government. The bank is also planning to raise Rs 500 crore through issuance of additional Tier I bonds.
Bank of Maharashtra shares closed at Rs 44.60 per scrip on the BSE today, up 0.22 per cent from their previous close.