 "Bank of Maha Q2 net up 72% at Rs 920 cr, rules out equity capital offering")
Bank of Maharashtra’s (BoM) net profit for the quarter ended September (Q2FY24) grew 72 per cent year-on-year (YoY) to Rs 920 crore, thanks to a substantial rise in net interest income (NII) and stable asset quality.
Sequentially, the public-sector lender’s profit went up 4.27 per cent from Rs 882 crore in the quarter ended June (Q1 of FY24). Its stock closed 1.26 per cent higher at Rs 47.42 a share on BSE.
Capital adequacy ratio stood at 17.61 per cent with Tier-1 at 13.72 per cent at the end of September.
A S Rajeev, the bank’s managing director and chief executive, said in analyst calls that with retained profits, the capital adequacy is expected to touch 19 per cent by March. The bank has no plans for an equity capital offering in FY24 but may consider raising debt capital based on market conditions.
It raised Rs 1,000 crore in equity capital through qualified institutional placement (QIP) and Rs 550 crore via Tier-II bonds.
NII expanded 28.9 per cent to Rs 2,432 crore in Q2 of FY24, compared to Rs 1,887 crore in the same quarter a year ago. Sequentially, NII rose by 3.94 per cent from Rs 2,340 crore in Q1 of FY24.
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The bank’s net interest margin (NIM) expanded to 3.89 per cent in Q2 of FY24, compared to 3.55 per cent in Q2 of FY23. Sequentially, NIM was up from 3.86 per cent in Q1 of FY24, according to an analyst presentation. The bank has guided for NIM to be between 3.5 and 3.6 per cent.
Non-interest income comprising fees, commissions, treasury income and recoveries rose 33 per cent YoY to Rs 668 crore. Sequentially, it rose marginally from Rs 629 crore in Q1FY24.
The lender’s provisions for non-performing assets (NPAs) rose to Rs 531 crore in Q2, from Rs 597 crore in the year-ago period. Sequentially as well, provisions rose from Rs 539 crore in Q1FY24.
Advances grew 23.5 per cent YoY to Rs 1.83 trillion in Q2 of FY24.
It expects to grow its loan book by 20-21 per cent in the current financial year, Rajeev said.
Total deposits increased 22.2 per cent YoY to Rs 2.39 trillion. The share of low-cost deposits — current account and saving account (CASA) — declined to 50.71 per cent at the end of September, down from 56.27 per cent a year ago.
The asset quality profile improved with gross NPAs declining to 2.19 per cent in September from 3.40 per cent a year ago. Sequentially, it was down from 2.28 per cent in June 2023.
Net NPAs declined from 0.23 per cent in September from 0.68 per cent in the year-ago month. Sequentially, net NPAs were up from 0.24 per cent in June 2023.
The provision coverage ratio improved to 98.4 per cent in September from 95.04 per cent a year ago.