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Five-fold rise in 2006-07 profit; to pay 20%

THE CHAIRMAN and Managing Director of Bank of Maharashtra, Mr M.D. Mallya (left), with the Executive Director, Mr Rajiv Madhok, addressing a press conference in the Capital on Monday. — Kamal Narang

New Delhi April 30 Bank of Maharashtra for the fourth-quarter ended March 31, 2007, posted a net profit of Rs 75.27 crore as compared to a loss of Rs 33.41 crore posted in the corresponding previous quarter. The total income for the fourth quarter was up 37.36 per cent at Rs 852.99 crore against Rs 620.98 crore during the same period last year.

The operating profit was at Rs 166.52 crore (Rs 78.9 crore).

For the financial year 2006-07, the net profit registered a five-fold rise at Rs 271.84 crore against Rs 50.79 crore in the financial year 2005-06. The total income increased 18.22 per cent to Rs 2,987.08 crore (Rs 2,526.69 crore).

The bank declared a dividend of 20 per cent compared to four per cent given last year.

Addressing a press conference on Monday, Mr M.D. Mallya, Chairman and Managing Director, said, "Three main factors such as strong interest, non-interest income and good recovery of non-performing assets (NPAs) have resulted in strong numbers."

The non-interest income (excluding treasury income) during the year rose 44 per cent to Rs 304.51 crore (Rs 211.92 crore). This rise was on account of increase in commission, exchange and brokerage income by 30 per cent and increase in recovery in written off accounts by 218 per cent.

"The total business of the bank reached Rs 57,382 crore against Rs 43,986 crore, a 30.46 per cent rise. The total deposits registered an absolute increase of Rs 7,013 crore to Rs 33,919 crore, a 26 per cent growth," Mr Mallya said.

The bank's CASA (current account savings account) registered 27 per cent rise during the fiscal under review. The share of CASA to total deposits stood at 43.16 per cent against 42.84 per cent in 2005-06.

"The performance in resource mobilisation, especially CASA, enabled the bank to reduce the cost of deposits from 5.16 per cent to 5.12 per cent," he said. The bank's advances grew 37 per cent to Rs 23,462 crore (Rs 17,080 crore). The yield on advances increased substantially from 8.27 per cent to 8.89 per cent.

"The bank's priority sector advances increased 32 per cent from Rs 7,206 crore in 2005-06 to Rs 9,576 crore during the fiscal and the percentage of the priority sector advances to the net bank credit was at 41.22 per cent as against the stipulated 40 per cent.

He said that the agricultural advances increased from Rs 2,750 crore to Rs 3,884 crore, up 41 per cent. The bank up to March 31, 2007 has formed 36,719 self help groups and the current advances to the SHGs was at Rs 76.76 crore, a year-on-year growth of 59 per cent. Lending towards the SME sector increased 34 per cent to Rs 2,047 crore as against Rs 1,533 crore.

Mr Mallya also announced that the recovery performance was good and was able to recover Rs 351 crore (Rs 178 crore). "This has resulted in the bank being able to bring its gross NPAs to 3.5 per cent as against 5.53 per cent in 2005-06 and the net NPAs as on March 31, 2007 was at 1.21 per cent as compared to 2.03 per cent the year before," Mr Mallya said.

The bank's capital adequacy ratio as on March 31, 2007 was a 12.06 per cent as against the minimum prescribed level of 9 per cent.

Business outlook for 2007-08

Mr Mallya said that for the current financial year the bank expects its deposits to grow by around 20-21 per cent, credit to rise by around 28 per cent and the total business to grow by around 25 per cent. Bank of Maharashtra, which implemented the core banking solution (CBS) in 66 branches during the last financial, expects to have around 200 branches under CBS by June this year and 600 out of its 1,345 branches under CBS by March 2008.

To a question on the issue of raising capital, Mr Mallya said "We have the option of both diluting government stake (77 per cent) and raising it through hybrid bonds but we are yet to firm up our capital plans for the current financial year."

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