Bank of Maharashtra Q2 profit up 13% on higher interest income, lower provisioning

 

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.

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Indian Overseas Bank(IOB) Q2 turns around to profits on lower provisioning

State-owned Indian Overseas Bank (IOB) on November 6 reported a net profit of Rs 148 crore for the second quarter of current fiscal as bad loans and provisions declined.

The Chennai-headquartered lender had registered a net loss of Rs 2,254 crore in July-September quarter a year ago. Sequentially, net profit grew 22.3 percent from Rs 121 crore in June quarter of this fiscal.

Total income rose 8.1 percent to Rs 5,431 crore during the quarter under review as against Rs 5,024 crore in the same quarter of 2019-20, Indian Overseas Bank (IOB) said in a regulatory filing. Interest income increased to Rs 4,363 crore from Rs 4,276 crore a year ago.

There was a substantial improvement in bank's asset quality as the gross non-performing assets (NPAs) plunged to 13.04 percent of the gross advances as of September 30, 2020 from 20 percent at the end of September 2019. In value terms, gross NPAs or bad loans fell to Rs 17,659.63 crore as against Rs 28,673.95 crore a year ago.

Net NPAs reduced to 4.30 percent (Rs 5,290.60 crore) from 9.84 percent (Rs 12,507.97 crore) a year ago. Total fresh slippages (other debits to existing NPA accounts) for September quarter were contained at Rs 292 crore, the lender said.

"Total cash recovery for September 2020 was Rs 513 crore (including cash recovery) as against Rs 172 crore in June 2020," it said.

Provisions for bad loans and contingencies fell to Rs 1,192.55 crore during the quarter under review from Rs 2,996.04 crore set aside in the year-ago quarter.

IOB said it has made required provisioning in advances in specific accounts so as to improve net NPAs. The bank's gross advances fell to Rs 1,35,469 crore as of September 30, 2020 from Rs 1,43,350 crore a year ago. However, it was slightly higher from Rs 1,31,565 crore at the end of June 2020.

"The bank has evolved a policy of not taking fresh exposures in stressed sectors, below hurdle rated accounts and BB and below rated accounts. The bank has also exited from accounts in the stressed sectors, wherever feasible," it said. The bank has grown under retail and agri sector and re-balanced the advance balance by consciously reducing the stressed sector in corporate segment, it added.

Provision coverage ratio improved to 89.36 percent at the end of September 2020 as against 75.85 percent at the end of September 2019. IOB's average cost of deposit reduced to 4.89 percent from 5.41 percent, while net interest margin improved to 2.18 percent for the quarter as against 1.86 percent in the year-ago period.

The bank said on relaxation of COVID-19 related lockdowns, it started mega e-auction process pan-India for sale of properties. The first such e-auction was conducted, fetching countable recovery by sale of properties and such e-auctions are planned to be conducted every month like in 2019-20, IOB said.

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Union Bank of India sees net profit jump 55%

 State owned Union Bank of India on Friday reported a 55.3 per cent jump in its net profit at Rs 517 crore in the second quarter ended September.

The bank had posted a net profit of Rs 333 crore in the same quarter a year ago.

Net interest income grew by 6.1 per cent to Rs 6,293 crore in the July-September period of 2020-21 from Rs 5,934 crore in the same period of 2019-20, it said in a release.

Gross Non-Performing Assets (NPAs) ratio improved to 14.71 per cent of the gross advances at the end of September this year from 15.75 per cent by September 2019.

Net NPAs fell to 4.13 per cent as of September from 6.40 per cent in the year-ago period.

Provision coverage ratio improved to 83.16 per cent as of September 30, 2020, compared to 74.26 per cent in the year-ago period.

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Central Bank of India Q2 Results: Net profit rises 20%

Central Bank of India on Friday reported over 20 per cent rise in its net profit at Rs 161 crore for the second quarter ended September 30. The bank had posted a net profit of Rs 134 crore in the corresponding quarter of the previous financial year.

Its total income grew nearly 2 per cent to Rs 6,833.94 crore during July-September 2020, against Rs 6,703.71 crore in the year-ago period, Central Bank of India said in a regulatory filing.

Operating profit improved to Rs 1,458 crore, registering a growth of 42.16 per cent from Rs 1,026 crore a year ago, it said.

The lender also improved on its bad assets ratio with the gross non-performing assets (NPAs) falling to 17.36 per cent of gross advances by the end of September 2020, from 19.89 per cent by the end of September 2019.

Net NPAs fell to 5.60 per cent, against 7.90 per cent in the year-ago quarter.

In value terms, the gross NPAs fell to Rs 30,785.43 crore from Rs 33,497.22 crore, while net NPAs stood at Rs 8,683.58 crore as against Rs 11,551.91 crore.

Provisions for bad loans and contingencies, however, rose to Rs 1,104.92 crore for the reported quarter of 2020-21, from Rs 791.33 crore in the year-ago period.

The bank's total business stands at Rs 5,00,737 crore as against Rs 4,73,080 crore, it added.

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Bank of India(BoI) Q2 results: Profit jumps over two-fold

Bank of India on Friday reported over two-fold jump in September quarter consolidated net profit at Rs 543.47 crore as bad assets came down. The bank posted a net profit of Rs 257.31 crore for the same quater a year ago.

Total income rose to Rs 12,477.79 crore in July-September 2020-21 from Rs 12,062.55 crore in the year-ago period, the state-owned lender said in a regulatory filing.

On standalone basis, the net profit in the quarter rose to Rs 525.78 crore as against Rs 266.37 crore a year ago.

Income grew to Rs 12,408.66 crore from Rs 11,985.50 crore.

The bank's gross non-performing assets (NPAs) fell to 13.79 per cent of gross advances as on September 30, 2020 from 16.31 per cent by the year-ago period.

In value terms, gross NPAs or bad loans stood at Rs 56,231.76 crore as against Rs 61,475.60 crore earlier.

Net NPAs came down to 2.89 per cent (Rs 10,443.71 crore) from 5.87 per cent (Rs 19,645.83 crore).

However, provisions for bad loans increased to Rs 2,133.87 crore during the quarter from Rs 1,452.09 crore parked aside for the year-ago same quarter.

Overall provisions and contingencies also rose to Rs 2,312.29 crore in the quarter under review from Rs 2,052.27 crore a year ago.

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Kotak Mahindra Bank Q2 net profit rises 26%

Private sector lender Kotak Mahindra Bank on Monday reported 26% jump in net profit for quarter ending 30 September, 2020 at Rs.2,184 crore. It was Rs. 1,724 crore a year ago.

Net interest income for Q2FY21 increased to Rs.3,913 crore, from Rs.3,350 crore in Q2FY20, up 17%. Net interest margin (NIM) for Q2FY21 was at 4.52%.The total income (standalone) rose to Rs.8,288.08 crore in the July-September period as against Rs.7,986.01 crore in the year-ago period.

CASA ratio as on 30 September, 2020 stood at 57.1% compared to 53.6% as on 30 September, 2019.Average savings deposits grew by 32% to Rs.1,06,442 crore for H1FY21 compared to Rs.80,425 crore for H1FY20.

Advances as on 30 September, 2020 were at Rs.2,04,845 crore as compared to Rs.2,13,299 crore as on 30 September, 2019).Covid-related provisions as of 30 September, 2020 stood at Rs.1,279 crore (0.62% of net advances).

The bank's asset quality improved on a net basis, with the non-performing assets (NPAs) falling to 0.64 per cent of the net advances as of September 30, 2020, from 0.85 per cent by September-end 2019.

In value terms, the net NPAs were down at Rs.1,303.78 crore compared to Rs.1,811.40 crore.However, the gross NPAs rose to 2.55 per cent ( Rs.5,335.95 crore) from 2.32 per cent ( Rs.5,033.55 crore).

Provisions for bad loans and contingencies came down to Rs.368.59 crore for the reported quarter, from Rs.407.93 crore parked aside for the year-ago period. "The Bank has not recognised any NPAs since 31 August, 2020, in line with the interim order of Supreme Court. If the said Order was not given effect to, the GNPA would have been 2. 70% and NNPA 0.74%. The Bank has, however, made provision for such advances," the bank said in a stock exchange filing.

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State Bank of India(SBI) Q2 result: Profit jumps 52% YoY

State Bank of India's (SBI's) September quarter (Q2FY21) standalone net profit jumped 52 per cent year-on-year to Rs 4,574.16 crore as the lender's provisions declined during the quarter. In comparison, it had clocked a net profit of Rs 3,011.7 crore during the corresponding quarter of FY20.

On a quarterly basis, the profit rose 9 per cent from Rs 4,189.3 crore-profit reported in Q1FY21.

Given the uncertainty amid the Covid-19 pandemic, analysts had varying estimates for the bank’s profit. Edelweiss Securities, for instance, had pegged the profit at Rs 2,117.2 crore, while those at ICICI Securities saw the PAT at Rs 4,676.5 crore. 

Profit before tax (PBT) for the bank came in at Rs 6,341.45 crore for the quarter under review, up 25.33 per cent from Rs 5,059.8 crore logged in the previous-year quarter. It advanced 14.3 per cent from Rs 5,546.1 crore QoQ.

The Mumbai-based bank’s operating profit increased nearly 12 per cent to Rs 16,460 crores in Q2FY21 from Rs 14,714 crores clocked in Q2FY20.

The lender’s net interest income (NII) – the difference between interest earned on loans and paid on deposits – came in at Rs 28,182 crore compared with Rs 24,600 crore earned in Q2FY20. Sequentially, it logged an improvement of 5.7 per cent from Rs 26,641 crore-income reported in June quarter of FY21.

Domestic Net Interest Margin (NIM) improved to 3.34 per cent in Q2FY21, registering an increase of 12 bps YoY.

Asset quality

The bank’s gross non-performing assets (GNPA) declined to Rs 1.25 trillion during the recently concluded quarter, as against Rs 1.29 trillion in Q1FY21.

In ratio terms, the GNPA ratio improved 16 bps to 5.28 per cent from 5.44 per cent in the June quarter.

Net NPA, meanwhile, declined to Rs 36,450.7 crore from Rs 42,703.6 crore sequentially. The ratio dipped to 1.59 per cent from 1.86 per cent.

During the September quarter, the bank earmarked provisions worth Rs 10,118 crore, down 23 per cent YoY from Rs 13,138.9 crore set aside in Q2FY20. Of this, provisions for NPA were at Rs 5,619.28 crore, down from Rs 11,040.72 crore YoY. Sequentially, provisions dipped 19.06 per cent from Rs 12,501.3 crore.

Provision Coverage Ratio (PCR) has improved to 88.19%, up 696 bps YoY and 187 bps QoQ.

The bank reported fresh slippages worth Rs 2,756 crore during the quarter, down from Rs 3,637 crore in Q1FY21 and Rs 8,805 crore in Q2FY20.

Moratorium and restructuring

According to the bank’s financial statement, the lender has extended moratorium to loans worth Rs 8.21 trillion as on August 31, 2020. Besides, it has reclassified loans worth Rs 11,357.78 crore as on September 30, 2020.

"Additional provisions made during the quarter stood at Rs 239 crore as against Rs 1,836 crore set aside in Q1FY21," it said in a statement.

The bank received applications for restructuring of loans worth Rs 6,495 crore in October, 2020. Provisions on such loans stand at Rs 650 crore.

Loan book

Credit growth for the bank logged an improvement of 6.02 per cent over the previous year, mainly driven by retail advances (14.55 per cent YoY), agri advances (4.19 per cent YoY) and corporate advances (2.82 per cent YoY). Total advances at the end of Q2 were at Rs 23.83 trillion, as against Rs 22.48 trillion in Q2FY20 and Rs 23.85 trillion in Q1FY21.

"With the YoY growth in Corporate Bonds / CPs at Rs 54,980 crores, the loan book has grown by 7.97 per cent YoY. That apart, home loan, which constitutes 23 per cent of bank’s domestic advances, has grown by 10.34 per cent YoY," it said.

Total Deposits, meanwhile, grew at 14.41 per cent on a yearly basis to Rs 34.70 trillion, out of which current account deposit grew by 8.55 per cent YoY, while saving bank deposits grew by 16.28 per cent YoY.

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Bank of Baroda(BoB) Q2 results: Net profit doubles

 State-owned Bank of Baroda on Thursday reported a standalone net profit of Rs 1,678.6 crore for July-September quarter (Q2FY21) on the back of lower provisons. In the previous quarter of the current fiscal (Q1FY21), the lender had incurred a loss worth Rs 864.26 crore. On a yearly basis, PAT grew 128 per cent from Rs 736.6 crore.

On a consolidated basis, profit was Rs 1,771.22 crore for Q2FY21, as against a net loss of Rs 678.71 crore in the June quarter. In the year-ago period, however, consolidated net profit stood at Rs 853.41 crore. 

The numbers beat Street expectations by a huge margin. Analysts at Motilal Oswal Financial Services, for instance, had pegged the net profit at Rs 139.4 crore, while those at Phillip Capital had expected the PAT to stand at Rs 541.7 crore. 

Profit before tax (PBT) for the quarter under review jumped 126.33 per cent YoY to Rs 2,50.23 crore in Q2 from Rs 1,126.76 crore in Q2FY20. In the June quarter, pre-tax loss was Rs 864.26 crore.

Net interest income (NII) came in at Rs 7,507.53 crore for the quarter under review, rising marginally from Rs 7,028 crore income earned in Q2FY20. Sequentially though, the income increased from Rs 6,816 crore. Analysts at Phillip Capital had expected the NII to come in at Rs 6,887.4 crore.

Provisions and asset quality

Provisions set aside in the September quarter declined sharply to Rs 3,001.59 crore on a QoQ basis from Rs 5,627.7 crore set aside in Q1FY21. Of these, provisions for NPA stood at Rs 2,277.25 crore. In Q2FY20, provisions stood at Rs 4,209.16 crore.

"In accordance with the RBI guidelines, the bank was required to make provisions of not less than 10 per cent of the outstanding advances in respect of borrower account where asset classification benefit has been granted. However, the Bank had made provision at 20 per cent in March 31, 2020 while w.e.f. April, 2020 provision at 10 per cent is made wherever the said benefit is extended to the borrowers," the management said in a statement.

As per the details provided by the bank, loan accounts worth Rs 85,898.55 crore are under moratorium as of September 30, 2020. Loan accounts worth Rs 14,022.5 crore were classified at the end of Q2FY21.

As per the RBI's June 7 circular, the bank has made additional provision of Rs 633 lakh during the quarter ended September 30, 2020 and holds total provision of Rs 3,615.50 crore as on September 30, 2020. 

The asset quality improved margianlly to 9.14 per cent in Q2FY21 from 9.39 per cent in Q1FY21. Net NPA, meanwhile, was at 2.5 per cent, down from 2.8 per cent. If the bank had declared those accounts as NPA, which it has not classified as bad loan due to the Supreme Court's ruling, the GNPA would have come in at 9.33 per cent and NNPA would have been 2.67 per cent.

Non-Performing Assets Provisioning Coverage Ratio (including floating provision) is 85.35 per cent as on September 30, 2020. In absolute terms, GNPA was Rs 65,698 crore in Q2FY21, down from Rs 69,132 crore in the June quarter of FY21. NNPA slipped from Rs 19,449.68 crore in Q1FY21 to Rs 16,794.93 crore.

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