Bank of Maharashtra reports 25% jump in Q1 profit on higher interest income

State-owned Bank of Maharashtra on Thursday reported 24.69 per cent jump in net profit at Rs 101 crore for June quarter 2020-21 helped by healthy interest income and lower operating cost.

The lender had reported a profit after tax of Rs 81 crore in the year-ago same quarter and Rs 58 crore in the quarter ended March 31, 2020.

The profit in the quarter was on account of growth in net interest income (NII) and reduction in operating cost, Managing Director and CEO A S Rajeev told reporters.

NII increased to Rs 1,088 crore during the quarter from Rs 997 crore in the year-ago period.

Net Interest Margin stood at 2.43 per cent as against 2.59 per cent.

Gross non-performing asset (NPA) stood at 10.93 per cent as against 17.90 per cent while net NPA was at 4.10 per cent compared to 5.98 per cent.

Fresh slippages in the period were Rs 77 crore. Recoveries and upgradation stood at Rs 156 crore.

Provision coverage ratio (PCR) increased to 85.62 per cent as on June 30 as against 81.24 per cent last year. The increase in PCR is mainly on account of Covid-19 provision.

During the quarter, the lender made Covid-19 related provision of Rs 275 crore. It holds a cumulative provision of Rs 425 crore related to Covid-19 as on June 30, 2020, which is more than minimum required by the RBI.

Rajeev said of the total loan book, Rs 16,481 crore is under moratorium. Close to 24 per cent of customers have availed moratorium on term loans as announced by RBI.

The bank has fully provided for wage settlement announced by the Indian Banks Association (IBA) on Wednesday. IBA and bank employees union have agreed for an annual wage hike of 15 per cent for around 850,000 bank employees, effective from November 2017. Total deposits grew by 10.11 per cent to Rs 152,987 crore and gross advances rose 3.86 per cent to Rs 96,621 crore.

Capital adequacy stood at 13.21 per cent with common equity tier 1 ratio of 10.23 per cent as on June 30, 2020.

The lender is looking to open 200 new branches by end of this year, with 50 by September-end.

Its scrip ended at Rs 11.87, up 2.15 per cent on BSE on Thursday.