Detailed Narrative
Strong Q3 FY26 Performance Exceeding Guidance
Bank of Maharashtra reported its highest ever quarterly profit of INR1,779 crores for Q3 FY26, contributing to a 9-month net profit of INR5,005 crores. The bank surpassed its guidance across several key parameters, with total business growing 17.24% YoY to INR5,95,000 crores against a 15% target, and advances increasing 20% YoY against a 17% target. ROA stood at 1.86% (guidance 1.75%) and ROE at 23.79% (guidance above 20%), demonstrating robust profitability.
Improving Asset Quality and Controlled Slippages
The bank continued to improve its asset quality, with Gross NPA reducing to 1.60% from 1.72% in the previous quarter, and Net NPA falling to 0.15% from 0.18%. These figures are well within the bank's guidance of less than 2% Gross NPA and less than 0.25% Net NPA. While slippages increased slightly to INR700-750 crores this quarter, the slippage rate as a percentage of the advance book remained stable at 1.2%, consistent with the previous year.
Strategic Deposit Growth and CASA Focus
Total deposits grew 15.3% YoY, exceeding the 14% guidance, with CASA share maintained above 50%. Management emphasized a conscious strategy to raise low-cost deposits, with CASA growing 16% YoY this quarter. The bank has allowed high-cost bulk deposits to degrow by 7% YoY and reduced its DRI component from 13% to 5.08%, focusing instead on profitable growth and alternative funding sources like refinance transactions of INR14,000-15,000 crores at a blended rate of 6-6.5%.
Diversified Credit Growth Across Segments
Credit growth was strong across segments, with Retail growing 36% YoY, Home Loans 28% YoY, Vehicle Loans 54% YoY, and Gold Loans 56% YoY. The RAM to Corporate share stood at 63-37, exceeding the 60-40 +/- 2 guidance. The bank's total gold loan book, including co-lending, reached INR22,000 crores, with INR5,000 crores from co-lending. Corporate growth also contributed significantly at 19% YoY, with a focus on green financing and data centers.
Treasury Performance and One-off Impact
The treasury segment reported a profit of INR136 crores this quarter, but recorded a loss of INR180 crores on investment, compared to a profit of INR99 crores last quarter. This was primarily due to a one-off📎 hit of INR290 crores from the amalgamation of Maharashtra Gramin Bank and Vidarbha Konkan Gramin Bank. Excluding this one-off📎, the treasury profit would have been around INR115-112 crores. FX operations profit for 9 months reached INR107 crores, up from INR63 crores last year.
LDR Management and Branch Expansion Strategy
The bank's LDR for Q3 stood at 116.36%, with an internal guidance to maintain it around 83-84%. Management is actively managing liquidity through low-cost deposits and alternative funding, rather than high-cost bulk deposits. The bank is aggressively expanding its branch network, having opened 116 branches this fiscal year as part of a plan to open 321 scientifically selected branches in 18 months, with a long-term goal of 1,000 branches in five years to drive core business growth.