Mumbai, Oct 17

Bank of Maharashtra (BoM) reported a 103 per cent year-on-year (yoy) jump in second quarter net profit on the back of rise in net interest income and lower loan loss provisions even as it clocked robust growth in advances and improvement in asset quality.

The Pune-headquartered public sector bank recorded a net profit of ₹535 crore in Q2FY23 against ₹264 crore in the year-ago quarter.

Net interest income (difference between interest earned and interest expended) was up 26 per cent y-o-y at ₹1,887 crore (₹1,500 crore in the year-ago quarter).

Non-interest income was down 40 per cent y-o-y at ₹502 crore (₹832 crore), mainly weighed down by decline in treasury income and miscellaneous income.

Provision for non-performing assets (NPAs) declined 42 per cent y-o-y to ₹532 crore (₹922 crore).

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Asset quality improved, with gross NPAs declining to 3.40 per cent of gross advances as on September-end 2022 against 3.74 per cent as on June-end 2022. Net NPAs declined to 0.68 per cent of net advances against 0.88 per cent.

Referring to the operating profit increasing only by 4.43 per cent y-o-y to ₹1,462 crore, AS Rajeev, MD & CEO, BoM, underscored that in the corresponding quarter last year, there was an exceptional item amounting to about ₹260 crore due to recovery from DHFL.

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Corporate credit growth higher

Gross advances increased by 28.62 per cent to ₹148,216 crore, with corporate & other advances clocking the highest growth among all categories of advances (38.56 per cent), followed by retail (26.60 per cent), MSME (24.58 per cent), and agriculture (11.58 per cent).

Rajeev said corporate credit growth is higher amidst rising interest rates due to availment of earlier sanctioned limits.

Total deposits up by 7.86 per cent to ₹195,849 crore, with the share of low-cost current account, savings account deposits increasing to 56.27 per cent (53.91 per cent).

Credit-deposit ratio improve

The BoM chief said the credit-deposit ratio has improved to about 76 per cent due to robust credit growth and the bank going in for slightly higher borrowings instead of increasing deposit rates.

He emphasised that the Bank has excess statutory liquidity ratio securities amounting to about ₹17,000 crore, which can be channelised towards credit.

Referring to the robust Capital to Risk-weighted Assets Ratio of 16.71 per cent, Rajeev said the bank is in a comfortable position on this front and there is no urgency to raise equity capital. The bank may raise capital via this route either in Q4FY23 or Q1FY24.

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