Detailed Narrative
Strong Q2 FY26 Financial Performance
Bank of Maharashtra reported a robust Q2 FY26, with net profit increasing by 23% to ₹1,633 crores. Total business grew by 14% to ₹5.63 lakh crores, driven by a 12.13% rise in deposits and a nearly 17% increase in advances. The bank maintained a healthy Net Interest Margin (NIM) of 3.85% and improved its Return on Assets (ROA) to 1.82%, alongside a lower cost-to-income ratio of 37.1%.
Improving Asset Quality and Robust Provisioning
Asset quality saw significant improvement, with Gross NPAs declining to 1.72% and Net NPAs to 0.18%. The Provision Coverage Ratio (PCR) stands strong at 98.34%, indicating adequate provisioning. Slippages in SMA-1 and 2 categories decreased by 74 basis points, from 2.61% to 1.87%, reflecting better asset management. The credit cost for the quarter improved to 0.92% from 1.19% sequentially.
Strategic Deposit Growth and Cost Management
The bank's deposit growth was primarily driven by low-cost CASA deposits, which grew by almost 15% year-on-year. Concurrently, high-cost bulk deposits saw a 9.9% de-growth as the bank consciously chose not to renew them. This strategy helped maintain the bank's average CASA ratio above 50%, outperforming the industry trend, and contributing to managing the overall cost of funds.
Capital Adequacy and Fund Raise Plans
The Capital Adequacy Ratio (CRAR) improved to 18.13%, with Tier-1 capital at 14.96%. The bank has secured Board approval for a ₹7,500 crore fundraise, comprising ₹5,000 crore in equity and the remainder in debt, to support future growth. This fundraise is also intended to help comply with SEBI's Minimum Public Shareholding norms, as the Government of India's holding has reduced to 79.6% from 86.46%.
Focused Credit Growth and Underwriting Standards
The bank is rebalancing its RAM portfolio, aiming for a 60:40 split between Retail and Agri/MSME. Retail segments like home loans (30-31% growth), gold loans (47% growth), and vehicle loans (49% growth) showed strong traction. The bank has implemented stricter underwriting, not extending loans to clients with CIBIL scores below 681 and focusing on prime borrowers, with 27% of sanctions in the last 12 months being for CIBIL scores above 800.
Aggressive Branch Expansion and Digital Initiatives
Bank of Maharashtra plans to open 1,000 new branches over the next five years, with an immediate initiative to open 321 branches within the next 18 months, all outside Maharashtra. This expansion is guided by scientific analysis to identify potential growth centers. Digital initiatives include revamped mobile banking applications and end-to-end digitalized underwriting for small-ticket KCC loans, starting with Maharashtra.
International Operations and Rating Upgrade
The bank's GIFT IBU became operational this quarter, achieving ₹100 million in business within its first half-year of operation, with an aspiration to reach a $1 billion book in the next 12 months. This international expansion is complemented by an upgrade in its S&P Global rating to BBB-, a three-notch improvement, and increased FII holding from 0.39% in 2023 to 2.58% in September 2025.