BoM Reports 45% Surge in Q4 Profit to Rs 1,218 Cr; Plans Fundraiser in FY25

Bank of Maharashtra's net profit surged 45% to Rs 1,218 crore in Q4FY24, driven by reduced bad loans and increased interest income. Annual net profit jumped 55% to Rs 4,055 crore. Net interest income rose 18.17% to Rs 2,584 crore, boosted by loan growth and wider net interest margin. Asset quality improved, with Gross NPAs falling to 1.88% from 2.47% a year ago. The bank plans 16-20% loan growth in FY25, targeting NIMs of 3.7-3.9%. It aims to raise capital and reduce government holding to 75%. Loan growth was strong in retail and agriculture sectors, while corporate lending saw modest growth. The bank plans to expand its branch network and business correspondent reach.

State-owned Bank of Maharashtra on Friday reported a 45 per cent rise in net profit to Rs 1,218 crore for the March 2024 quarter, helped by a decline in bad loans and a rise in interest income.

The Pune-based lender had earned a net profit of Rs 840 crore in the year-ago period. For full fiscal 2023-24, its net profit jumped 55 per cent to Rs 4,055 crore.

Its core net interest income grew 18.17 per cent to Rs 2,584 crore for the March quarter on the back of a 16 per cent growth in advances and a nearly 0.20 per cent widening in the net interest margin at 3.97 per cent.

Interest income grew to Rs 5,467 crore during the period under review from Rs 4,495 crore in the corresponding quarter a year ago.

The bank's non-interest income rose 24 per cent to Rs 1,022 crore during the fourth quarter and was helped by a 40 per cent growth in the core fee income.

On the asset quality side, the bank's Gross Non-Performing Assets (NPAs) were reduced to 1.88 per cent of gross advances as of March 31, 2024, from 2.47 per cent by the end of March 2023.

Net NPAs also came down to 0.20 per cent of the advances from 0.25 per cent at the end of 2024.

The fall in bad loans ratio helped cut the provisions towards NPAs for Q4FY24 to Rs 457 crore compared to Rs 545 crore a year ago.

The bank's newly inducted managing director and chief executive officer Nidhu Saxena told reporters that it is targeting loan growth of 16-20 per cent in FY25, and expects the NIMs (net interest margins) to be between 3.7 per cent and 3.9 per cent.

The bank will also be looking to raise capital in FY25, he said, adding that this will be with the dual purpose of bolstering the buffers for loan growth and reducing government holding to 75 per cent in compliance with the Sebi's mandate.

At present, the government ownership in the bank stands at over 86 per cent. The bank will have to raise capital of up to Rs 7,500 crore to bring down the government holding to 75 per cent, a senior official said, adding that this will be split in three tranches of which at least one will happen in FY25.

However, Saxena did not spell out the exact quantum or route to be adopted for the share sale the bank is targeting but said that it will seek to maintain the overall capital adequacy at 17 per cent, which is the same as the present level.

The managing director is targeting a significant increase in the bank's overall heft, and moving up to 10th among the 12 state-owned banks by the end of FY25, up from the current 11th position.

The loan growth in FY24 was driven by retail at 19 per cent and agriculture at 30 per cent, while corporate loan growth came at 5.76 per cent.

A senior official said it has started the new business and customer acquisition recently, which will focus on services like payments and collection, channel finance and payrolls to drive growth.

The bank plans to add up to 200 branches to its network of 2,500 branches, and take the business correspondents to 10,000 from the present over 3,000 by the end of the fiscal, Saxena said.

On the asset quality front, it reported fresh slippages of Rs 555 crore, and the gross non-performing assets ratio improved to 1.88 per cent from 2.47 per cent in the year-ago period.

Shares of the bank settled 3.65 per cent higher at Rs 67.62 apiece on the BSE, as against a correction of 0.82 per cent on the benchmark.

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