Bank of Maharashtra Q1 net profit jumps nearly 25%

Bank of Maharashtra on Thursday reported 24.6 per cent jump in net profit at Rs.101.02 crore for the first quarter of 2020-21 financial year as bad loans came down.

The Pune-headquartered lender posted a net profit of Rs.81.09 crore for the same quarter of 2019-20

Total income increased to Rs.3,264.81 crore during April-June, 2020-21 from Rs.3,191.88 crore in the year-ago same period, Bank of Maharashtra said in a regulatory filing.

The bank's provisions for bad loans or non-performing assets (NPAs) fell to Rs.408.91 crore during the reported quarter from Rs.1,037.44 crore in the year-ago period.

Total provisions including contingencies were at Rs.608.94 crore in the quarter under review as against Rs.920.72 crore in the same period of 2019-20.

The lender improved on its asset quality to a great extent by bringing down gross NPAs to 10.93 per cent of the gross advances as on June 30, 2020 from 17.90 per cent by end-June 2019.

In absolute value, gross NPAs stood at Rs.10,558.53 crore as against Rs.16,649.58 crore.

Net NPAs fell to 4.10 per cent ( Rs.3,677.39 crore) from 5.98 per cent ( Rs.4,856.27 crore).

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Privatization Of PSU Banks, Insurance Starts Soon

Privatization of the PSUs will now be resumed by the Government of India and about four unmerged banks and insurance companies will be privatized in the next part of the project.

The privatization of PSU Banks was postponed in 2020 due to the outbreak of the Coronavirus pandemic, which put the whole process on hold because of their low valuations and mounting stressed assets.

As per reports, Punjab & Sind Bank, IOB, Bank of Maharashtra might be privatized, along with state-run insurance companies, such as National Insurance Company, United India Insurance, and Oriental Insurance Company.

Prior to this, the Government had also sold their shares in the Bharat Petroleum Corp Ltd (BPCL), Shipping Corp of India (SCI), THDC India, and NEEPCO. The Govt also announced that it will also sell its 30% stake from the state run rail hauler Container Corp of India (Concor).

Recently, the Government of India had also announced economic reforms in wake of the Coronavirus pandemic, wherein it was declared that every PSU in India will be now privatized, except 4 in strategic sectors.

As per reports, a draft cabinet note has already been sent for inter-ministerial consultations to identity strategic and non-strategic sectors. 

A government official close to the development said, “A broader policy will look at sectors that have market imperfections due to the government’s presence, where the private sector can take the lead and ensure that the monopoly should not happen due to state-run companies.”

He also said that sectors like banks, insurance, space, defence will be privatized.

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Bank of Maharashtra posts net profit in Q4

State-owned Bank of Maharashtra(BoM) on Tuesday posted a 20 per cent decline in net profit at Rs 57.57 crore in the fourth quarter ended on March 31 hit by the COVID-19 crisis.

The bank had posted a net profit of Rs 72.38 crore in the corresponding quarter of the previous financial year.

The total income during the January-March quarter of 2019-20 rose to Rs 3,198.30 crore from Rs 3,160.79 crore in the year-ago quarter, the bank said in a release.

“The profit in the (March) quarter was down as we made certain additional provisions for COVID of around Rs 150 crore during the quarter as against the required provision of Rs 38 crore," the bank's managing director and CEO A S Rajeev said.

The higher provision is on account of a 20 per cent provision the bank made on its SMA (special mention account) 2 book which is at Rs 702 crore as against the regulatory requirement of 10 per cent, he further explained.

“Had this higher provision not there, our profit would have been over Rs 200 crore during the quarter," Rajeev said.

Nearly 40 per cent of the bank's borrowers have availed the moratorium on term loans announced by the RBI. In value terms, close to Rs 16,400 crore of its total term loan book is under moratorium.

Its net interest margins stood at 2.41 per cent in the quarter ended March as against 2.64 per cent in the same period last year.

On the assets front, gross bad loans or non-performing assets (NPAs) of the bank came down to 12.81 per cent of the gross advances as on March 31, 2020, from 16.40 per cent a year ago.

Net NPA came down to 4.77 per cent from 5.52 per cent a year ago.

Provision coverage ratio improved to 83.97 per cent as on March 31 as against 81.49 per cent as on March 2019, it said.

Its recovery and upgradation stood at Rs 511 crore during the quarter. Fresh slippages were at Rs 942 crore as against Rs 1,085 crore.

Capital adequacy ratio under Basel III stood at 13.52 per cent as compared to 11.86 per cent. Net advances rose 5.09 per cent to Rs 86,872 crore as against Rs 82,666 crore.

"In terms of RBI circular dated April 17, the bank has made provision of Rs 150 crore in FY20 towards COVID-19 Regulatory Package Provision as against required provision at the rate of 5 per cent that is Rs 38 crore," it said.

For the entire financial year 2019-20, Bank of Maharashtra earned net profit of Rs 389 crore as against loss of Rs 4,783 crore in the previous fiscal.

Net Interest Margin of the bank improved to 2.60 per cent in 2019-20 as compared to 2.53 per cent in 2018-19.

During the year, the business, a mix of total deposit and advances, increased to Rs 2,44,955 crore from Rs 2,34,117 crore in 2018-19.

As per the RBI direction, the bank has not announced dividend despite posting profit for 2019-20.

The past several weeks have witnessed the country battling an unprecedented crisis on account of COVID-19 pandemic, it said, adding, the Bank was quick to recognize the gravity of the situation and took various supportive measures for the welfare of  the customers and employees.

Bank waived service charges in Current and Savings account up to June 30, 2020. Besides, the bank has introduced GECL scheme under Emergency Credit Line Guarantee Scheme.

Under this scheme, the bank has been offering working capital loan up to 20 per cent of the borrowers total outstanding credit (max upto Rs 25 crore) to all business accounts with annual turnover up to Rs 100 crores for FY 2019-20.

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Bank of Maharashtra posts net profit in Q3FY20

State-run Bank of Maharashtra on Monday reported a net profit of Rs 135 crore in the quarter ended December against a net loss of Rs 3,764 crore in the year-ago period.

On quarter-on-quarter basis, the lender had reported a net profit of Rs 115 crore.

"Net profit increased to Rs 135 crore in the quarter supported by an increase in net interest income, robust recovery and control on expenses," the bank said in a statement.

Net interest income (NII) rose 36 per cent to Rs 1,186 crore.

Net interest margins (NIM) stood at 2.86 per cent compared to 2.41 per cent in the year-ago period.

Net NPAs (non-performing assets) stood at 5.46 per cent or Rs 4,507 crore as against 5.91 per cent or Rs 4,647 crore.

During the quarter, it classified Rs 72,019 crore of loans as fraud and holds a 100 per cent provisioning on these accounts.

The bank said it sees a very bleak chances of recovery from a few accounts and have adequately made provision.

In the April-December period, it made 100 per cent provision for 25 such accounts and 50 per cent provision for three accounts.

Total provision for these accounts as of December 31, 2019 stood at Rs 2,403.37 crore. It restructured 3,445 MSME accounts worth Rs 24,747 lakh in the second quarter as per the January 1 circular of the RBI.

Capital adequacy ratio increased to 11.21 per cent against 11.049 per cent and tier 1 ratio stood at 9.44 per cent as of December-end.

Total business grew by 4.55 per cent to Rs 2,35,867 crore.

Deposits was up by 4.4 per cent to Rs 1,41,986 crore while credit stood at Rs 93,882 crore as on December 31, 2019.

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Bank of Maharashtra Q2 net profit jumps over four-fold

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.

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Bank of Maharashtra reported profit in June quarter

Public Sector lender Bank of Maharashtra monday reported a profit of Rs 89 crore in Q1FY20 on account of a tax write-back. Higher NII, other income and operating income also supported profitability.

The bank had posted a loss of Rs 1,108 crore in the corresponding period last fiscal.

Net interest income grew 16.1 percent year-on-year (YoY) to Rs 996.8 crore in the quarter ended June 2019.

Asset quality weakened further during the quarter with gross non-performing assets as a percentage of gross advances rising 150 bps sequentially to 17.9 percent and net NPA increasing 46 bps quarter-on-quarter (QoQ) to 5.98 percent in Q1.

Provision for bad loans declined sharply by 31 percent YoY to Rs 1,037.44 crore but increased 338 percent sequentially.

Bank of Maharashtra received a tax refund of Rs 343.3 crore in Q1 against Rs 43.5 crore in the same period last year.

Other income or non-interest income grew by 21 percent YoY to Rs 419.24 crore and operating profit increased 40 percent to Rs 658.45 crore in Q1.

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Bank of Maharashtra posts a profit in Q4 on better asset quality

State-run Bank of Maharashtra (BoM) Monday reported a net profit of Rs.72.38 crore in the quarter to March as against a net loss of Rs.113.51 crore in the year-ago period.

The bank, however, reported a net loss of Rs.4,783.88 crore for full year to March 2019, more than four times the loss it had reported in FY18 at Rs.1,145.65 crore.

Total income rose to Rs.3,160.79 crore in the reporting quarter from Rs.3,094.46 crore in the same period last fiscal year, the lender said in a statement.

Gross non-performing assets improved to 16.40% from 19.48%, while net NPA more than halved to 5.52% from a high 11.24%.

The lender restructured 7,556 MSME accounts amounting to Rs.411.69 crore during the year and treated them as standard assets.

In the reporting quarter, the bank classified loans worth Rs.410.62 crore as fraud as per the RBI guidelines and holds 100% provisions for them. For the entire year, it had classified Rs.1,448 crore as fraud.

Of the 17 accounts referred by the RBI to bankruptcy tribunals, the bank sees uncertainty in recovery and has made 100% provisions worth Rs.4,857 crore.

During the year, the bank made Rs.387.53 crore in provisions for all performing and non-performing accounts of the bankrupt IL&FS, the bank said.

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First three PSU Banks which are removed from RBI's PCA list

A Reserve Bank of India (RBI) panel has decided to remove both Bank of India , Bank of Maharashtra and Oriental Bank of Commerce from its prompt corrective action plan (PCA) for state-owned banks that had high levels of bad debt and inadequate capital, a source directly aware of the development told Reuters on Thursday.

The source, who asked not to be named as the discussions are private, said the move follows improvements in the asset quality and capital ratios of both banks.

The RBI’s board for financial supervision took the decision at its meeting on Thursday after reviewing the December quarter performance of all banks on the PCA list, the source said.

In case of Oriental Bank of Commerce, it may also be removed from the list pending the outcome of a technical clarification from the bank, the source added. the net NPA has come down to less than 6 per cent as the government has infused sufficient capital, it said. Hence, it has been decided to remove the restrictions placed on Oriental Bank of Commerce (OBC) under PCA framework, subject to certain conditions and close monitoring, the apex bank added. 

The RBI put 11 state-owned lenders on the PCA list in the past few years. As a result, it barred them from issuing fresh big-ticket loans and expanding their operations, as well as putting their financial performance under close scrutiny.

RBI Press Release:-

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