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Bank of Maharashtra’s (BoM) net profit soared 95 per cent year-on-year (y-o-y) in the first quarter net to ₹882 crore against ₹452 crore in the year ago quarter on the back of robust growth in net interest income and other income, and decline loan loss provisions.
Net interest income (difference between interest earned and interest expended) of the Pune-headquartered public sector bank was up 39 per cent y-o-y at ₹2,340 crore (₹1,686 crore in the year go quarter).
Other income, comprising income (including commission) from non-fund based banking activities, fees, earning from foreign exchange, profit/loss on sale of assets, profit/loss (including revaluation) from investments, recovery from accounts written off, etc, jumped 98 per cent to ₹629 crore (₹317 crore).
Net interest margin increased to 3.86 per cent in the reporting quarter from 3.28 per cent in the year ago quarter.
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Loan loss provisions declined 15 per cent y-o-y to ₹539 crore (₹637 crore).
The gross non-performing assets (NPA) to gross advances position improved to 2.28 per cent as at June-end 2023, against 2.47 per cent as at March-end 2023.
The net NPA to net advances position improved a tad to 0.24 per cent as at June-end 2023 against 0.25 per cent as at March-end 2023.
Total deposits increased by 25 per cent y-o-y to stand at ₹2,44,365 crore as on June-end 2023. Low cost current account, savings account (CASA) deposits declined to 50.97 per cent as at June-end 2023 against 53.38 per cent as at March-end 2023.
Total Advances rose by 24.63 per cent yoy to stand at ₹1,75,676 crore on the back of 24.83 per cent growth in RAM (retail, agriculture and MSME) advances and 24.35 per cent growth in corporate & other advances..
AS Rajeev, MD & CEO, expects the Bank to clock 20-22 per cent growth in advances and 14-15 per cent growth in deposits in the current financial year. The bank could end FY24 with a GNPA ratio of 2 per cent on the back recoveries, including upgradation, of about ₹3,000 crore.
On the increase in special mention account advances/SMA (of ₹1 crore & above) to 0.72 per cent of gross advances from 0.45 per cent in the preceding quarter, senior bank officials observed that some of the accounts in the MSME and retail category slipped into SMA (which indicates incipient stress) mainly due to increase in lending rate.
However, these accounts are expected to pull back as interest rates could trend lower, going forward.
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