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Buoyed by a robust increase in net interest income and ‘other income', Bank of Maharashtra reported a 92 per cent jump in net profit at Rs 100 crore in the July-September 2011 quarter, against Rs 52 crore in the corresponding period last year.
In the reporting quarter, net interest income (the difference between interest earned on advances and investments and interest expenditure) was up 37 per cent to Rs 633 crore (Rs 461 crore in the July-September 2010 quarter) and other income rose 23 per cent to Rs 145 crore (Rs 118 crore).
BoM Chairman and Managing Director, Mr A. S. Bhattacharya, attributed the bank's profitability to enhanced focus on retail business, reduction in high-cost bulk deposits and improved recoveries.
As at September-end 2011, retail deposits constituted 63 per cent of the total deposits, against 54 per cent as at September-end 2010.
The bank retired bulk deposits aggregating Rs 3,400 crore in the July-September 2011 period. As at September-end 2011, bulk deposits stood at Rs 8,000 crore, accounting for 11.5 per cent of the total deposits.
Sustained recovery efforts saw the bank make recoveries aggregating Rs 368 crore in the April-September quarter. As of September-end 2011, the gross non-performing assets (NPAs) stood at Rs 1,110 crore.
“We are diversifying our revenue streams by stepping up lending to segments such as agriculture, mid-corporate and micro, small and medium enterprises,” said Mr Bhattacharya.
Net interest margin of the bank improved to 3.24 per cent from 2.71 per cent as at September-end 2010. NIM is the difference between a bank's earnings on loans and other assets and interest paid on borrowed funds divided by the average amount of assets.
Capital infusion
The bank has approached the Government for a capital infusion of Rs 900 crore to boost its capital adequacy ratio, which as at September-end 2011 stood at 11.88 per cent.
“Once the capital infusion happens, our capital adequacy ratio will go up to 14 per cent and this will enable us to lend more,” said Mr M. G. Sanghvi, Executive Director, Bank of Maharashtra.
Shares of BoM closed at Rs 48.75, up 1.67 per cent on the BSE, on Monday.
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