Bank of Maharashtra Q3 net profit more than doubles to Rs 325 crore on higher NII growth

The lender also generated Rs 200 crore through sale of Priority Sector Lending Certificates

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The bank is aiming at a C-D ratio of 69-70 per cent going ahead

State-run Bank of Maharashtra’s (BoM) Thursday reported a 110.7 per cent jump in its standalone profit after tax (PAT) at Rs 325 crore in the quarter ended December 2021 due to higher net interest income (NII) and improved asset quality. This is the highest-ever quarterly profit reported by the Pune-headquartered lender. In the quarter ended December 2020, the bank had reported a profit after tax of Rs 154 crore.

Its Managing Director and CEO A S Rajeev said that the profit during the quarter was driven by a jump in NII. The lender also generated Rs 200 crore through sale of Priority Sector Lending Certificates (PSLC). It saw its credit-deposit ratio improving to 67 per cent from 61 per cent earlier, resulting into higher profits during the quarter.

The bank is aiming at a C-D ratio of 69-70 per cent going ahead. Net interest income grew by 16.9 per cent to Rs 1,527 crore as against Rs 1,306 crore for Q3 FY’21. Net interest margin (NIM) improved to 3.11 per cent from 3.06 per cent in the year-ago period.

Its asset quality improved during the quarter, with gross non-performing assets (GNPAs) declining to 4.73 per cent from 7.69 per cent. Net NPA reduced to 1.24 per cent from 2.59 per cent. Total provisions increased to Rs 838 crore from Rs 753 crore. The lender made a higher provision of Rs 587 crore in the quarter for bad loans as compared to Rs 386 crore made in the same quarter of the previous fiscal.

Provision coverage ratio improved to 93.77 per cent as against 89.55 per cent. Fresh slippages stood at Rs 577 crore in the quarter ended Rs 11 crore in the year-ago period. Its Special Mention Account 2 (SMA2) book stood at Rs 1,672 crore as of December 3, 2021. The bank expects slippages of Rs 500-600 crore from its SMA2 book during Q4FY22, Rajeev said. Its recovery and upgradation stood at Rs 500 crore in the quarter.

In the fourth quarter, the bank expects recovery and upgradation of Rs 1,000 crore, he said. The Covid restructuring book stood at Rs 5,600 crore. Its capital to Risk (Weighted) Assets Ratio (CRAR) improved to 14.85 per cent, of which tier I stood at 10.61 per cent. Rajeev said the lender is planning to raise between Rs 500-750 crore through Qualified institutional placements (QIP) route in February.

It may look at raising Rs 1,000 crore through tier-1 bonds in the first quarter of FY23. Gross advances increased by 22.98 per cent to Rs 1,29,006 crore and total deposits rose by 15.21 per cent to Rs 1,86,614 crore. The lender is aiming at a 17-20 per cent growth in advances and 10-12 per cent in deposits in the current fiscal, Rajeev said. The bank’s scrip closed at Rs 21 apiece, down 2.33 per cent on BSE.

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