Bank of Maharashtra September quarter net jumps four-fold to Rs 115 cr

Bank of Maharashtra | Photo: Wikipedia

State-owned Bank of Maharashtra on Tuesday said its net profit jumped over four-fold to Rs 114.66 crore in the second quarter ended September 30, due to fall in bad loan proportion leading to decreased provisioning requirement.

The bank had registered a net profit of Rs 27 crore in July-September quarter of the previous fiscal.

Total income of the bank during the second quarter of 2019-20 rose to Rs 3,295.91 crore, as against Rs 3,192.80 crore in same period of last year, the bank said in a regulatory filing.

Asset quality of the bank witnessed improvement with the gross non-performing assets (NPAs) coming down to 16.86 per cent of the gross advances as on September 30, 2019 from 18.64 per cent as on September end, 2018.

In absolute value, the gross NPAs of the bank were of Rs 15,408.51 crore, down from Rs 16,872.84 crore.

The net NPAs or bad loans were also trimmed to 5.48 per cent (Rs 4,406.56 crore) from 10.61 per cent (Rs 8,742.86 crore).

Provisions for bad loans and contingencies came down to Rs 359.23 crore for the September quarter from Rs 941.71 crore a year ago.

The bank said that during the quarter ended September 30, 2019, loans and advances amounting to Rs 2,224.49 crore have been classified as fraud in terms of RBI guidelines and bank holds 100 per cent provision in respect of such advances.

Also, the bank said that since December 31, 2018, the bank has made accelerated provision in respect of sub-standard accounts from 15 per cent to 20 per cent and in respect of doubtful accounts from 40 per cent to 50 per cent as per the approved board policy in line with RBI guidelines.

"In respect of certain loan accounts, there is significant erosion of securities and/or chances of recovery are bleak. Therefore, bank has made 100 per cent provision in respect of 17 accounts for the half year ended September 30, 2019.

"Total provision against these accounts is Rs 1,606.15 crore," it said.

Stock of Bank of Maharashtra closed 13.33 per cent up at Rs 11.05 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