Bank of Maharashtra Q2 profit up 13% to Rs 130 cr on higher interest income

On a consolidated basis, its profit stood at Rs 130.44 crore, compared to Rs 115.15 crore in the year-ago period.
Bank of Maharashtra on Monday reported 13.44 per cent growth in standalone net profit at Rs 130 crore for September quarter, helped by lower provisioning and higher interest income. The bank logged a profit after tax of Rs 115 crore in the second quarter of 2019-20.

On a consolidated basis, its profit stood at Rs 130.44 crore, compared to Rs 115.15 crore in the year-ago period.

Profit increase was mainly due to the net interest income (NII), which grew by around 5 per cent. There was considerable reduction in operating expenses by around Rs 75 crore. Provisions have also come down as asset quality improved, Managing Director and CEO A S Rajeev told reporters.

He said the bank had an interest reversal of Rs 300 crore which it kept as provisions in the second quarter for Covid-19 and for some of the accounts that were not classified as NPA.

Rajeev said had the bank not kept aside the interest reversal amount as provisions, NII growth would have been 14-15 per cent in the second quarter.

Net interest margin stood at 2.62 per cent for the quarter as against 2.77 per cent in the year-ago quarter.

Rajeev said so far the bank has restructured 800 small accounts, including MSMEs, worth Rs 40 crore, under the Reserve Bank of India's one-time restructuring scheme for accounts affected by Covid-19 related stress. It has restructured 25 MSME accounts worth Rs 4-5 crore.

For the corporate loans, the lender received two applications, of which one is not eligible.

The other application of amount (bank's exposure) Rs 200 crore is pending. It is a consortium account and a decision will be taken at the consortium level, he said.

Gross NPA reduced to 8.81 per cent from 16.86 per cent. Net NPA declined to 3.30 per cent as against 5.48 per cent.

Total provisions stood at Rs 676 crore as against Rs 637 crore. Provision for NPAs was Rs 43 crore as against Rs 404 crore.

Provision Coverage ratio improved to 87.15 per cent as compared to 82.71 per cent.

The bank holds cumulative Covid-19 provision including interest of Rs 925 crore (out of which Rs 500 crore provision was made in the second quarter).

In pursuance of the Supreme court order, the bank has not declared those accounts as NPA which were not declared NPA till August 31, 2020. As a matter of prudence, the lender made additional provision of Rs 120 crore.

Capital adequacy stood at 13.18 per cent with common equity tier 1 ratio of 10.31 per cent as at end-September.

The bank's total deposits grew 12.15 per cent year-on-year to Rs 1,58,626 crore. Gross advances rose 13.13 per cent to Rs 1,03,408 crore.

Bank of Maharashtra stock ended 7.01 per cent up at Rs 11.91 on BSE.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel