Bank of Maharashtra on Tuesday reported a 44% year-on-year jump in its net profit to Rs 1,327 crore for the quarter ended September, driven by a healthy increase in the net interest income and advances. Net interest income rose 15% on year to Rs 2,807 crore, helping the net interest margin (NIM) to improve to 3.89%.
“The target for the NIM for the current fiscal is 3.75-3.85%, anticipating a rate cut during the course of the year,” managing director Nidhu Saxena said. The bank has the highest NIM among the public sector lenders. He said the bank expects the net profit to cross Rs 5,000 crore during the current fiscal.
Gross advances surged 19% to Rs 217,504 crore, while total deposits grew 15.46% to Rs 2,76,289 crore. The CASA (current and savings account) deposits increased by 12.23%, reaching Rs 1,36,174 crore. Overall, total business grew 16.90% on year. The RAM (retail, agri and MSME) segment showed a robust 26% growth.
Retail advances grew 22.53%, MSME advances by 33.86% and agriculture advances by 24.96%. Meanwhile, corporate banking remained moderated. On this, Saxena said infrastructure, pharma, renewable energy and tie-ups with term lending institutions are the preferred sectors with push from the government. “Wherever is the emphasis of the government and where we get good margins, we would like to participate.”
Despite the likelihood of moderation in net interest income, the bank was able to achieve a significant growth in NII. On the asset quality side, gross non-performing assets (NPAs) declined to 1.84% from 2.19% in the year-ago period. Net NPAs fell to 0.20% during the period under review from 0.23% in the previous quarter.
Provisions for NPAs stood at Rs 598 crore for the quarter ended September, a tad higher than Rs 586.4 crore for the previous quarter, while remaining flat on year. Expecting some slippages in agri loans, additional provisions were made during the quarter, the bank said.
The capital adequacy ratio stood at 17.26% with a common equity tier 1 (CET1) ratio of 11.97%.
As of September 30, 2024, the liquidity coverage ratio was at 105%, just above the threshold of 100%. The bank is planning to raise it to 110%, keeping in mind the draft guidelines on LCR norms, which are to be implemented in April.