State-run Bank of Maharashtra reported fiscal first quarter net profit of Rs 882.08 crore, up 95.2% from Rs 451 crore a year before.

The surge in profit was due to a rise in net interest income (NII) and a decline in bad loans.

Sequentially, the net profit rose 5% from Rs 840.04 crore in the quarter ended March 2023. 

Total income in the quarter ended June grew to Rs 5,417 crore from Rs 3,774 crore in the same period a year ago.

NII

NII rose 38.8% to Rs 2,339.72 crore in the quarter ended June 2023 compared to Rs 1,685.71 crore a year ago. Sequentially, NII grew 6.52% from Rs 2,187 crore in Q4 FY23.

Net interest margin (NIM) expanded 58 basis points (bps) to 3.86% in the April-June quarter compared to 3.28% a year ago. 

Sequentially, NIM rose 3.78% in Q4 of FY23. The bank expects NIMs to be between 3.75% and 3.8%.

Non-interest income rose 98% year-on-year to Rs 629 crore. Sequentially, it fell by 23.5% from Rs 829 crore in Q4 FY23. 

Provisions for non-performing assets (NPAs) declined to Rs 539.1 crore from Rs 637.5 crore a year ago.

The lender made a provision of Rs 250 crore for any additional burden due to shifting to expected credit loss (ECL) for loan portfolio.

Asset quality

The bank's asset quality improved, with gross non-performing assets (NPA) declining to 2.28% of gross advances in the June quarter, from 3.74% a year ago. 

In absolute terms, gross NPA stood at Rs 4,006 crores compared Rs 5,259 crore a year ago. 

Net NPA declined to 0.24%, improving from 0.88% in June 2022. 

The lender's net NPA stood at Rs 413 crore, compared to Rs 1,206 crore in the corresponding period last year.

Provision coverage ratio (PCR) improved to 98.37% from 95.04% a year ago. 

Capital adequacy increased to 18.07% from 16.15% in the same quarter of the previous year.

Deposits

Deposits grew 24.7% to Rs 2.44 lakh crore from Rs 1.96 lakh crore a year ago. 

Current account savings account (CASA) deposits rose to Rs 1.24 lakh crore from Rs 1.09 lakh crore, with current account deposits recording 30% growth and savings account deposits posting 9% growth.

CASA comprised 50.97% of the total deposits, down from 56.08% a year ago.

The bank will be able to maintain CASA share above 50%, Bank of Maharashtra managing director and CEO AS Rajeev said.

Advances

Gross advances grew 25% on a year-on-year basis to stand at Rs 1.75 lakh crore compared to Rs 1.40 lakh crore in the year-ago quarter.

Advances in the retail sector stood at Rs 44, 952 crore compared to Rs 36,117 crore in the April-June FY23 quarter. 

Advances to agriculture sector stood at Rs 23,637 crore compared to Rs 19,336 crore last year. 

Micro, small and medium enterprises recorded advances of Rs 33,740 crore in the June quarter versus Rs 26,121 crore a year before.

Segment revenues

The revenue for the bank's treasury operations stood at Rs 1,169 crore, up from Rs 938 crore a year before.

Corporate and wholesale operations recorded a revenue of Rs 2,028.83 crore during the quarter as against Rs 1,217 crore in the same period last year.

Retail banking operations recorded a revenue of Rs 2,174.75 crore compared to Rs 1,557 crore a year ago.

Guidance

Rajeev said the bank expects credit growth of 20-22% in FY24 while deposits could rise by 14-15%.

To meet the credit growth, the bank plans to raise Rs 2,000 crore from Tier I and Tier II bonds, he added.

As far as recovery is concerned, the bank expects Rs 3,000 crore during the current year.

The bank expects to keep NIM at 3.75% to 3.85% in FY24. 

The yield on advances will be around the same levels with the bank moving to risk-based pricing, Rajeev said.