Bank of Maharashtra reported a year-on-year increase of 26.51% in net profit to Rs 1,779 crore for the December quarter. This was the bank’s highest-ever quarterly profit. The growth was driven by a 16.27% rise in net interest income to Rs 3,422 crore. The net interest margin during the quarter was 3.87%, exceeding the guidance of 3.75% for FY26.
What did Managing Director and CEO of Bank of Maharashtra say?
Nidhu Saxena, the Managing Director and CEO of Bank of Maharashtra, stated that the bank had surpassed its guidance and delivered an industry-leading performance. He highlighted the continuous improvement in asset quality and strong double-digit growth across all lending segments during this quarter.
The bank achieved a CASA (Current Account Savings Account) ratio of 50% for the first three quarters, compared to the industry average of 43-44%, and Saxena expressed confidence that maintaining these levels would not be a challenge. He noted that the bank’s cost of deposits reduced by 20 basis points during the December quarter, contributing to its high level of profitability.
The bank’s gross non-performing assets (NPAs) decreased to 1.60%, down 12 basis points, while the net NPAs dropped to 0.15%, a decline of 10 basis points from the previous year.
Expansion into Global Markets
The bank began lending from its GIFT City International Business Unit in the second quarter and reached the $400 million mark (Rs 3,550 crore) this month. Saxena indicated that the bank aims to grow its overseas business portfolio to $1 billion (Rs 10,000 crore) in the first year, which would be a significant growth driver.
The bank plans to offer these products, particularly to customers seeking external commercial borrowings, to enhance customer loyalty. The bank is also implementing the Infosys Finacle system at its international branch, which will enable it to deliver a wider range of offerings in the global market.
Strong Growth in Deposits and Advances
BoM’s advances grew by 18.08% year-on-year to Rs 2.82 trillion, while total deposits increased by 15.30% year-on-year to Rs 3.21 trillion in the December quarter. The distribution of advances included retail loans at 30%, MSME (Micro, Small, and Medium Enterprises) at 19%, agriculture and allied activities at 14%, and corporate loans at 37%.
Within the retail segment, housing loans saw significant growth, increasing by 28% year-on-year to Rs 46,000 crore.
Regarding plans to raise funds, Saxena mentioned that the bank is adequately capitalised and does not currently need to seek additional #growth funds. He noted that the government’s holding in the bank has decreased to 75%, with the possibility of further reductions down to 51% in future.
The decision to reduce the holding will be made at an appropriate time based on future funding needs. The bank has also received approval to raise Rs 10,000 crore through infrastructure bonds and plans to issue bonds depending on market conditions and interest rates.
The bank recently received a BBB- rating from S&P, and an upgrade is anticipated in the domestic market, which would enable it to access the bond market at lower rates, Saxena said.