Bank of Maharashtra (BoM) on Tuesday reported 13.91% year-on-year development in net profit for the quarter ended December 2020 to Rs 154 crore. The rise in net profit was driven by 10.12% y-o-y development in net interest earnings to Rs 1,306 crore coupled with net interest margin (NIM) enhancing to 3.06%. BoM MD & CEO AS Rajeev mentioned it was for the initially time in 4 years that the bank had crossed the NIM of 3%.
The bank’s gross NPAs as on December 31, 2020, had been 7.69% against 16.77% on December 31, 2019, even though net NPAs lowered to 2.59% in the quarter below critique against 5.46% in the exact same period final year. The bank has created a cumulative Covid-19 provision of Rs 955 crore. According to the Supreme Court order, the bank has not classified these accounts as NPAs but had created more provision of Rs 150 crore, of which Rs 30 crore was in the third quarter.
Its price to earnings ratio had gone down slightly and this was primarily due to the fact of a a single-time expenditure of Rs 230 crore on wage arrears payable to retired personnel and retirement added benefits contribution, which was totally absorbed in the December quarter, the MD mentioned.
Rajeev mentioned the bank’s CASA deposits enhanced by 300 basis points to 50.91%, even though provision coverage ratio enhanced to 90%. There was 22% development in the retail, agriculture and MSME advances for the duration of the quarter. BoM’s retail advances grew 28.89% to Rs 27,540 crore even though MSME advances had been up 26.31% to Rs 20,304 crore for the duration of the quarter below critique. According to the MD, this was not just pent up demand or festival sales. The bank expects development in retail loans to continue in the fourth quarter of FY21 and even strengthen additional. Banks have benefitted from the withdrawal of NBFC from the market place, Rajeev mentioned. This has helped in retail development, so compared to 16%-18% development final fiscal year, they had noticed 26% to 28% development in the retail loans this year, he added. He expects the NBFCs to bounce bank as soon as the Covid predicament is more than, but this window of chance is readily available to the banks for yet another 5 to six months, he mentioned.
In addition to development in retail demand, investment in infrastructure and new projects had began pouring in, adding to the optimism, he mentioned. With the government’s PLI scheme, the BoM MD expects a 2-3% enhance in the share of corporate loans. Corporate loans now account for 40% of the bank’s advances.
The BoM board has currently authorized capital raising plans with Rs 2,000 crore to be raised by way of bonds and Rs 1,000 crore by way of equity, Rajeev mentioned. During Q4FY21, the bank would appear at raising either Tier -I or Tier-II capital of Rs 500 crore by way of bonds to be utilised next year, he mentioned. They will appear at raising equity next year, based on the predicament.
The bank’s total company improved 13.15 % to Rs 2,66,875 crore with total deposits escalating 14.08% to Rs 1,61,971 crore and gross advances had been up 11.74 % to Rs 1,04,904 crore. The bank’s net revenues in Q2FY21 grew 15% on y-o-y basis to Rs 1,572 crore.