"The profit in the (March) quarter was down as we made certain additional provisions for COVID of around Rs 150 crore during the quarter as against the required provision of Rs 38 crore," the bank's managing director and CEO A S Rajeev said.
State-owned Bank of Maharashtra (BoM) on Tuesday posted a 20 per cent decline in net profit at Rs 57.57 crore in the fourth quarter ended on March 31 hit by the COVID-19 crisis.
The bank had posted a net profit of Rs 72.38 crore in the corresponding quarter of the previous financial year.
The total income during the January-March quarter of 2019-20 rose to Rs 3,198.30 crore from Rs 3,160.79 crore in the year-ago quarter, the bank said in a release.
“The profit in the (March) quarter was down as we made certain additional provisions for COVID of around Rs 150 crore during the quarter as against the required provision of Rs 38 crore,” the bank’s managing director and CEO A S Rajeev said.
The higher provision is on account of a 20 per cent provision the bank made on its SMA (special mention account) 2 book which is at Rs 702 crore as against the regulatory requirement of 10 per cent, he further explained.
“Had this higher provision not there, our profit would have been over Rs 200 crore during the quarter,” Rajeev said.
Nearly 40 per cent of the bank’s borrowers have availed the moratorium on term loans announced by the RBI. In value terms, close to Rs 16,400 crore of its total term loan book is under moratorium.
Its net interest margins stood at 2.41 per cent in the quarter ended March as against 2.64 per cent in the same period last year.
On the assets front, gross bad loans or non-performing assets (NPAs) of the bank came down to 12.81 per cent of the gross advances as on March 31, 2020, from 16.40 per cent a year ago.
Net NPA came down to 4.77 per cent from 5.52 per cent a year ago.
Provision coverage ratio improved to 83.97 per cent as on March 31 as against 81.49 per cent as on March 2019, it said.
Its recovery and upgradation stood at Rs 511 crore during the quarter. Fresh slippages were at Rs 942 crore as against Rs 1,085 crore.
Capital adequacy ratio under Basel III stood at 13.52 per cent as compared to 11.86 per cent. Net advances rose 5.09 per cent to Rs 86,872 crore as against Rs 82,666 crore.
“In terms of RBI circular dated April 17, the bank has made provision of Rs 150 crore in FY20 towards COVID-19 Regulatory Package Provision as against required provision at the rate of 5 per cent that is Rs 38 crore,” it said.
For the entire financial year 2019-20, Bank of Maharashtra earned net profit of Rs 389 crore as against loss of Rs 4,783 crore in the previous fiscal.
Net Interest Margin of the bank improved to 2.60 per cent in 2019-20 as compared to 2.53 per cent in 2018-19.
During the year, the business, a mix of total deposit and advances, increased to Rs 2,44,955 crore from Rs 2,34,117 crore in 2018-19.
As per the RBI direction, the bank has not announced dividend despite posting profit for 2019-20.
The past several weeks have witnessed the country battling an unprecedented crisis on account of COVID-19 pandemic, it said, adding, the Bank was quick to recognize the gravity of the situation and took various supportive measures for the welfare of the customers and employees.
Bank waived service charges in Current and Savings account up to June 30, 2020. Besides, the bank has introduced GECL scheme under Emergency Credit Line Guarantee Scheme.
Under this scheme, the bank has been offering working capital loan up to 20 per cent of the borrowers total outstanding credit (max upto Rs 25 crore) to all business accounts with annual turnover up to Rs 100 crores for FY 2019-20.