Bank of Maharashtra (BoM) net income rose 187 percent year over year to £ 165 billion in the fourth quarter, driven by a strong recovery in a technically amortized account and robust growth in net interest income.
Headquartered in Pune, the bank posted net income of £ 58 billion in the year-ago quarter. The higher net income for the quarter was despite a 92 percent increase in loan loss provisions.
Net interest income rose 35 percent year-on-year to 1,383 crore (1,023 crore). Noninterest income, comprised of fee income, trading income and other income, increased 215 percent to 1,235 crore.
MD & CEO, AS Rajeev said the recovery of £ 508 crore from Bhushan Power’s account (technically amortized) increased other revenue. Loan loss provisions, including Covid-19, rose to 1,376 crore (717 crore). The coverage ratio of the provisions improved to 90 percent at the end of March 2021, compared to 84 percent at the end of March 2020.
By the end of March 2021, total deposits were up 16 percent year over year to £ 1.74,006 billion and total advances were up 13 percent year over year to £ 1.07,654 billion.
In terms of deposits, the proportion of deposits in inexpensive current accounts and savings accounts (CASA) rose from 50 percent in the previous year to 54 percent.
For total advances, retail advances increased 26 percent. Advances in micro, small and medium-sized enterprises (35 percent); and agriculture (13 percent). However, the corporate and other advance payment declined by about 2 percent.
Rajeev expects deposits to grow by 14 to 15 percent and advances to grow by 15 to 16 percent in FY22. In addition, the share of CASA deposits could increase to 55 percent and the credit mix between retail and wholesale could increase from the current 63:37 to 65:35.
The net interest margin improved in the reporting quarter to 3.11 percent compared to 2.41 percent in the same quarter of the previous year.
The gross non-performing assets (NPA) position improved to 7.23 percent of gross prepayments from 12.81 percent in the prior-year quarter. Net NPAs decreased to 2.48 percent of net advances versus 4.77 percent
In the meantime, the bank has announced that it will raise up to 5,000 crore through equity and bonds.
In the past year, BoM was only able to raise 505 crores via tier II bonds from the enabling regulation for the inclusion of up to 3,000 crore. At that time, the market was not conducive to the development of Tier I issues (shares), said the head of the bank.
Rajeev said that in FY22, BoM could raise the resources through a public follow-up offer, rights issue, qualifying institution issue, preferential issue and Basel III-compliant bonds.