Bank of Maharashtra Q1 Net Jumps Over 2-fold to Rs 452 cr on Higher NII

KOCHI:
State-run Bank of Maharashtra on Monday reported a more than two-fold jump in net profit to Rs 452 crore in the April-June quarter, helped by a healthy net interest income and improvement in asset quality.

The lender had reported a net profit of Rs 208 crore on a standalone basis in a similar quarter of fiscal 2022. The bank’s Managing Director and Chief Executive Officer A S Rajeev said despite transfers and promotions of employees, the bank performed well and its net profit grew by 117.25 percent during the first quarter of the current fiscal.

”We envisage a higher growth from the second quarter onwards and are very positive on the future growth,” Rajeev told reporters. Net interest income (NII) rose by 20 percent to Rs 1,686 crore as compared to Rs 1,406 crore in Q1 of FY22. Net interest margin (NIM) improved to 3.28 percent from 3.05 percent.

Asset quality of the bank saw improvement with gross non-performing assets (GNPAs) easing to 3.74 percent from 6.35 percent. Net NPAs also fell to 0.88 percent from 2.22 percent. Recovery and up gradations in the reporting quarter stood at Rs 388 crore. It also recovered Rs 130 crore from the written-off accounts.

”We have set a cash recovery target of Rs 3,000 crore during FY23,” Rajeev said. The bank expects recoveries from the resolution of bad loans which are to be transferred to the National Asset Reconstruction Company Ltd (NARCL) during the year.

It also sees recoveries from stressed accounts including Religare Group, Srei Group, and Infrastructure Leasing and Financial Services (IL&FS).
The Pune-based lender’s provision coverage ratio improved to 95.04 percent from 90.70 percent. Total provisions declined to Rs 750 crore from Rs 899 crore in the year-ago period.

Its total Basel III capital adequacy ratio improved to 16.15 percent with a common equity tier 1 ratio of 12.16 percent for Q1 FY23. Rajeev said the bank may look at raising Rs 1,000 crore through tier 1 and tier 2 bonds in the current quarter.

”For the current fiscal, we are well capitalized. However, if the equity market improves, we may go for equity raising of Rs 1,000 crore in Q3 or Q4 of FY23,” he added.

As of June 20, 2022, gross advances grew by 27.10 percent on a Y-o-Y basis to Rs 140,561 crore and deposits by 12.35 percent to Rs 195,909 crore.
The bank expects a credit growth of 20-22 percent and a deposit growth of 12-14 percent in the current fiscal.

Rajeev said the lender is focusing more on the mid-corporate segment, which is a yield-increasing segment. It has a sanctioned pipeline of Rs 20,000-22,000 crore in corporate loans and another Rs 6,000-7,000 crore in MSME and other segments. Shares of the bank rose by 3.11 percent to close at Rs 16.6 apiece on BSE.