Bank of Maharashtra on Thursday said its net loss widened to Rs 455.45 crore for the March quarter because of higher provisioning for bad loans. The bank had incurred a net loss of Rs 119.84 crore in the corresponding quarter a year ago. The operating profit declined 22% to Rs 1,827 crore. Non-performing assets (NPAs) of Rs 3,500 crore was added in the last quarter after the asset quality review exercise. Increase tax expenses, increased provision for employee pension, gratuity and provident fund benefits further affected the profitability.
For the entire financial year, the Pune-based lender posted a total loss of Rs 1,372.51 crore, against a net profit of Rs 100.69 crore in the preceding financial year. Gross NPAs stood at 16.93% (Rs 17,189 crore) as against 9.34% as on March 31, 2016. Combined with stressed assets, this number was at 19.5%.
The bank said losses were on account of higher slippages of Rs 9,035 crore, resulting in interest reversal and additional provisioning requirement to the tune of Rs 3,800 crore. The bank had reported a profit of Rs 101 crore in FY16. R P Marathe, MD & CEO, who took over in September 2016, said this was the worst time for the bank, with stressed assets turning NPAs. He, however, said the current fiscal will be a year of revival for the bank. “We will be able to clean the balance sheet this year.”
The bank is eyeing a growth of 7.5% in FY18 with advances growing at 10.27%. Marathe said the bank will more aggressively pursue recoveries of bad loans and get tough with willful defaulters. The bank has declared 125 accounts as willful defaulters and the defaults amount to Rs 6,000 crore. In some of these, the bank is part of various consortiums of lenders. Corporate advances will be low on priority this year.
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Marathe said the bank would also look at controlling costs and increasing operational efficiency this year by going in for rationalisation of chronically loss-making branches and restructuring e zonal offices. On the credit side, the bank would focus on increasing the share of the retail segment to 50%. The bank’s total business stood at Rs 2,40.590 crore with deposits at Rs 1,39,053 crore. Of that, CASA deposits stood at Rs 62,419 crore. The bank totally repaid Rs 9,000 crore of certificates of deposit. Advances was down 8.72% to Rs 1,02,217 as there was lower credit demand and credit pick-up was low. However, the retail portfolio grew by 12%. The bank’s investments stood at Rs 38,842 crore.
The government has infused Rs 300-crore capital which was approved by shareholders. This infusion was important for meeting capital adequacy norms, Marathe said.