 "Bank of Maharashtra")
Bank of Maharashtra’s net profit during the quarter ended June 30, 2023 (Q1 of FY24) grew 95.2 per cent year-on-year (YoY) at Rs 882.08 crore, aided by a substantial rise in net interest income (NII) and a fall in provisions for bad loans.
Sequentially, the public sector lender’s profit went up 5 per cent from Rs 840.04 crore in the quarter ended March 2023 (Q4 of FY23). Its stock was trading 5.65 per cent higher at Rs 33.28 a share on BSE.
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NII expanded 38.8 per cent to Rs 2,339.72 crore in Q1 of FY24 compared to Rs 1,685.71 crore in the same quarter a year ago. Sequentially, NII rose by 6.52 per cent from Rs 2,187 crore in Q4 FY23.
Net interest margin (NIM) expanded 58 basis points (bps) to 3.86 per cent in Q1 of FY24 compared to 3.28 per cent in Q1 of FY23. Sequentially, NIM was up from 3.78 per cent in Q4 of FY23, according to an analyst presentation. The bank expects NIMs to be between 3.75 and 3.8 per cent.
Non-interest income rose 98 per cent YoY to Rs 629 crore. Sequentially, it fell by 23.5 per cent from Rs 829 crore in Q4 FY23. The lender’s provisions for non-performing assets (NPAs) declined from Rs 637.5 crore in Q1 of FY23 to Rs 539.1 crore in Q1 of FY24.
It made a provision of Rs 250 crore for any additional burden due to shifting to expected credit loss (ECL) for loan portfolio.
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The bank has estimated a total requirement of Rs 2,500 crore for shifting to the ECL regime. The Reserve Bank of India (RBI) has sought lenders’ observations on the draft roadmap for ECL.
Advances grew 25 per cent YoY to Rs 1.75 trillion in Q1 of FY24.
It expects to grow its loan book by 20-22 per cent and deposits by 14-15 per cent in the current financial year, said its managing director and chief executive A S Rajeev.
Total deposits increased 24.7 per cent YoY to Rs 2.44 trillion. The share of low-cost deposits — current account and saving account (CASA) — declined to 50.97 per cent at the end of June 2023. It was down from 56.08 per cent a year ago.
The bank will be able to maintain CASA share above 50 per cent, Rajeev said. The asset quality profile improved with gross NPAs declining to 2.28 per cent in June 2023 from 3.74 per cent in June 2022.
Net NPAs also declined from 0.88 per cent in June 2022 from 0.24 per cent in June 2022. The provision coverage ratio (PCR) improved to 98.37 per cent in June 2023 from 95.04 per cent a year ago. Capital adequacy stood at 18.07 per cent with tier 1 at14.25 per cent at the end of June 2023.
