Bank of Maharashtra Reports 27% Increase in Net Profit, Reaching Rs 2023 Crore
Bank of Maharashtra reported a net profit of Rs 2,023 crore for the first quarter of FY27, marking a 27% increase from Rs 1,594 crore in the same period last year. This growth was fueled by higher net interest income and a boost in non-interest income, as the bank’s loan growth enhanced interest earnings while diversifying its income streams.
Loan Growth and Interest Income
The bank’s profit surge was primarily attributed to an increase in its loan book, which drove interest income up to Rs 8,035 crore from Rs 7,105 crore a year earlier. Although interest expenses also rose to Rs 4,264 crore from Rs 3,762 crore, the growth in interest income outpaced these costs, resulting in a higher net interest income. Managing Director and CEO Nidhi Saxena emphasized the bank’s focus on maintaining healthy margins while expanding the loan portfolio.
Non-interest income also contributed significantly, rising to Rs 1,029 crore from Rs 825 crore. This increase was supported by gains in treasury income, fees and commissions, and recoveries. The bank’s operating profit improved to Rs 3,118 crore from Rs 2,570 crore, despite a moderate rise in operating expenses, particularly in employee costs.
Asset Quality and Provisions
The bank’s asset quality showed improvement, with the gross non-performing asset (NPA) ratio declining to 1.45% from 1.74%, and the net NPA ratio falling to 0.13% from 0.18%. Lower provisions also bolstered profitability, with provisions decreasing to Rs 840 crore from Rs 867 crore. Profitability ratios strengthened, with return on assets rising to 1.90% from 1.70%, and operating margin increasing to 34.4% from 31.9%.
Deposit Mobilisation and Capital Raising
Deposits grew to Rs 34.45 lakh crore from Rs 30.50 lakh crore, while advances increased to Rs 30.19 lakh crore from Rs 23.73 lakh crore, supporting the rise in interest income. The bank is also exploring overseas opportunities for deposit mobilization. Saxena stated that they aim to achieve significant mobilization under the FCNR(B) window by September 30.
Regarding capital raising, Saxena mentioned that the board has approved raising up to $500 million through bond issuances. The bank is carefully evaluating this option and plans to tap the markets at the appropriate time based on pricing. Additionally, Saxena noted that the Emergency Credit Line Guarantee Scheme (ECLGS) has contributed to growth, with approximately Rs 3,500 crore of advances under the scheme, including Rs 3,100 crore to MSMEs and Rs 400 crore to corporates.
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