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Bank of Maharashtra’s (BoM) net profit jumped 139 per cent year-on-year (y-o-y) to ₹775 crore in the third quarter ended December 31, 2022, on the back of robust growth in net interest income and decline in provisions and contingencies.
The Pune-headquartered public sector bank, which is eyeing a qualified institutional placement (QIP) of ₹500-1,000 crore in the fourth quarter, reported a net profit of ₹325 crore in the year-ago period.
Net interest income (difference between interest earned and interest expended) was up about 30 per cent y-o-y at ₹1,980 crore (₹1,527 crore in the year-ago period).
Other income, comprising fee based income, treasury income, and recovery in written off accounts, among others, edged up 5 per cent y-o-y to ₹641 crore (₹611 crore).
Provisions and contingencies, including bad loan provisions, declined about 30 per cent y-o-y to ₹582 crore (₹836 crore).
Net interest margin rose to 3.60 per cent from 3.11 per cent in the year-ago quarter.
Total deposits increased by about 12 per cent to ₹2,08,436 crore as of December-end 2022. Within total deposits, the proportion on low-cost current account, savings account deposits declined to 52.50 per cent of total deposits against 55.05 per cent in the year-ago quarter.
Gross advances rose by about 22 per cent y-o-y to ₹1,56,962 crore. Within this, corporate advances grew by 25 per cent; retail (23 per cent), MSME (22 per cent) and agriculture (9 per cent).
Gross non-performing assets (GNPAs) position improved to 2.94 per cent of gross advances as at December-end 2022 against 3,40 per cent as at September-end 2022. Net NPAs too declined to 0.47 per cent of net advances against 0.68 per cent.
AS Rajeev, MD & CEO, said gross advances and deposits are expected to grow by 20-22 per cent and 12-15 per cent, respectively, in the fourth quarter. GNPAs and NNPAs are expected to be below 3 per cent and 0.50 per cent, respectively, by March-end 2023, with net interest margin and profitability being sustained around the current levels.
Though the capital adequacy ratio of the Bank is robust at 17.53 per cent (excluding accrued profit) and it does not need capital to grow business, Rajeev said the QIP of equity shares is aimed at complying with SEBI regulations relating to minimum public shareholding (MPS) of 25 per cent.
The Government has about 91 per cent stake in the Bank. QIP could bring down it stake in the Bank by about 5 percentage points. The Government’s stake in the bank is expected to come down piecemeal to comply with MPS.
A senior official said the Bank is expected recoveries of about ₹1,000 crore in the fourth quarter, including about ₹156 crore from JP Infrastructure.
The Bank has short-listed 13 accounts aggregating about ₹2,700 crore to transfer to the National Asset Reconstruction Company Ltd.
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