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  1. Bank of Maharashtra net loss up 2.7 times on provisioning

Bank of Maharashtra net loss up 2.7 times on provisioning

AC Rout, executive director of BoM, said the higher loss was on account of higher provisioning at 71% and lower business on account of re-balancing of the portfolio, which was overweight on corporate loans.

By: | Pune | Published: August 4, 2018 1:41 AM
Net loss of Bank of Maharashtra has gone up by 2.7 times during Q1FY19 with the bank reporting it at Rs 1,119 crore.

Net loss of Bank of Maharashtra has gone up by 2.7 times during Q1FY19 with the bank reporting it at Rs 1,119 crore.

AC Rout, executive director of BoM, who is handling the responsibilities of the MD, said the higher loss was on account of higher provisioning at 71% and lower business on account of re-balancing of the portfolio, which was overweight on corporate loans.

However, Net Interest Margin has gone up to 2.33% in Q1FY19 compared to the Q1FY18’s 1.87%, indicating that the bank is performing well, he said. He said the bank could turnaround by the end of Q2 and Q3 this fiscal and reduce NPAs by around Rs 5,000 crore.

“We took a conscious call to go for front loading of our provisioning in case of the NCLT cases,” Rout said. Of the Rs 8,000 crore of NPAs that have gone to NCLT, BoM expects to see resolution which could bring in around Rs 4,000-5,000 crore this year.

The bank’s operating profit was at Rs 473 crore during the quarter compared to Rs 533 crore profit in the same quarter previous year and this was because of a drop in interest income on advances and a drop in treasury income.

The bank’s gross NPAs stood at Rs 17,780 crore and because of the denominator effect of shedding corporate assets, Rout said. Net NPAs were at Rs 9,195 crore. The provisioning coverage ratio improved by 15 percentage points to 62.19% in June 2018 compared to 47.32% in June 2017. This fiscal, till date, the bank has recovered Rs 925 crore.

The bank’s total business stood at Rs 2,19,458 crore as on June 30, 2018, compared to Rs 2,33,724 the same period previous year. The bank will focus on increasing advances to retail, agriculture and MSMEs.
Regarding the defaults by DSK Developers and the resultant arrest of the bank’s senior management who are now on bail, Rout said the matter was subjudice but these facilities extended to the customer was fully secured more than 125%. The bank had red flagged and initiated proceedings wherever necessary, he said.

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