State-owned Bank of Maharashtra (BoM) reported a significant 44% surge in its net profit, reaching Rs 1,327 crore for the second quarter ending September 2024. This increase, compared to Rs 920 crore in the same period last year, was largely attributed to a rise in interest income.
BoM’s total income for the quarter rose to Rs 6,809 crore, up from Rs 5,736 crore in the previous year. According to Managing Director Nidhu Saxena, the bank’s Net Interest Margin (NIM) also saw an uptick, rising to 3.98% from 3.88% a year ago, marking the highest NIM among public sector banks. The bank has set a target NIM of 3.75-3.85% for the current fiscal year, anticipating potential rate cuts.
The bank’s net profit for the first half of the fiscal year has already surpassed Rs 2,500 crore, positioning it on track to exceed Rs 5,000 crore by year-end. In the previous fiscal year, BoM had recorded a profit of Rs 4,055 crore.
Interest income for Q2 stood at Rs 6,017 crore, reflecting an increase from Rs 5,068 crore in the same period a year ago. Net Interest Income (NII) grew by 15.41%, reaching Rs 2,807 crore, compared to Rs 2,432 crore in Q2 FY2023.
On the asset quality front, BoM showed improvement, with gross Non-Performing Assets (NPAs) reducing to 1.84% from 2.19% a year ago, while net NPAs dropped to 0.20% from 0.23%. The bank’s Provision Coverage Ratio was marginally lower at 98.31%, compared to 98.40% a year ago. Provisions for bad loans remained steady at Rs 598 crore.
BoM raised Rs 3,500 crore through Qualified Institutional Placement (QIP) and Rs 1,000 crore from Tier II bonds during the quarter. Consequently, the government’s stake in the bank declined to 79.60% from 86.46% in the previous quarter. Despite having board approval to raise Rs 5,000 crore through equity sale, no further stake dilution by the government is anticipated this fiscal year.
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BoM’s Capital Adequacy Ratio stood at a healthy 17.26%, with a Common Equity Tier 1 (CET1) ratio of 11.97%. The bank’s total business grew by 16.9%, reaching Rs 493,793 crore, while the Current Account Savings Account (CASA) ratio declined slightly to 49.29% from 50.71% in the previous year.
