Bank of Maharashtra Q2 results: Net profit rises 23% to ₹1,633 crore

State-owned Bank of Maharashtra (BoM) on Tuesday reported a 23 per cent year-on-year (Y-o-Y) increase in net profit to ₹1,633 crore during the June–September quarter of FY26, mainly aided by healthy growth in net interest income (NII). Treasury income grew 34 per cent to ₹120 crore.

 

NII expanded 15.71 per cent Y-o-Y to ₹3,248 crore in Q2FY26, compared to ₹2,807 crore in the same quarter a year ago (Q2FY25). The net interest margin (NIM) moderated to 3.85 per cent in Q2FY26 from 3.98 per cent in Q2FY25.

 

Nidhu Saxena, managing director and chief executive officer (MD & CEO), Bank of Maharashtra, said in the post-results media conference, “We are well above the guidance of maintaining NIM at 3.75 per cent this year. Since 40 per cent of the portfolio is linked to repo, the calculations indicate 18–19 basis points compression in NIM as the bank has to pass on the rate cut to the above-said portfolio.” He added that the public sector lender is looking at other components to minimise the compression in interest margins.

 

As the bank is anticipating no rate cuts in Q3, the compression in NIM would be slightly lower as deposits will be re-priced.

 

With the cut in the cash reserve ratio (CRR), Saxena said that around ₹300 crore was released. “The first cut has already come, and that money, which I am able to deploy to higher-earning assets, is also contributing to our NIM number. If there are no rate cuts in the coming quarters, then the bank would be able to maintain NIM at the current levels,” Saxena added.

 

The bank’s non-interest income grew 7 per cent Y-o-Y to ₹845 crore in Q2FY26.

 

The bank continues to maintain a strong share of low-cost deposits, with a focus on keeping the current and savings account (CASA) ratio above 50 per cent. As of end-September, the CASA ratio was 50.35 per cent.

 

On the asset quality front, gross non-performing assets (NPA) improved year-on-year to 1.72 per cent in Q2FY26, and net NPA improved to 0.18 per cent during the reporting quarter. Provisions for NPAs declined to ₹583 crore in Q2FY26 from ₹598 crore in Q2FY25. The capital adequacy ratio of the bank rose to 18.13 per cent from 17.26 per cent in the same quarter of FY25.

 

Domestic advances grew to ₹2.53 trillion as of end-September, from ₹2.18 trillion a year ago. Retail advances grew 37.45 per cent Y-o-Y, and advances to the MSME sector grew 3.4 per cent. Total deposits increased 12.13 per cent Y-o-Y to ₹3.1 trillion.

 

The Reserve Bank of India (RBI) has released draft guidelines on expected credit loss (ECL), mergers, and acquisitions (M&A).

 

The bank has estimated a potential additional provisioning requirement of ₹2,500 crore for transitioning to the expected credit loss framework for loan loss provisioning. The ECL norms will come into effect from April 1, 2027, and banks will get four years to spread over the additional provision requirements.

 

This translates to a quarterly requirement of ₹100–125 crore, which the bank is well positioned to handle, having already built ₹50 crore into its balance sheet, Saxena said.