Detailed Narrative
Robust Financial Performance in FY25
Bank of Maharashtra reported a strong financial year, with total business growing by 15.30% year-on-year to ₹5,47,000 crore. This was driven by a 13.44% increase in total deposits to ₹3,07,000 crore and a 17.76% rise in advances to ₹2,40,000 crore. The bank's net profit for the full year surged by 36% to ₹5,520 crore, while operating profit for Q4 grew by 14% to ₹2,520 crore.
Significant Improvement in Asset Quality and Profitability
Asset quality saw substantial improvement, with Gross NPA declining to 1.74% and Net NPA reducing to 0.18%. The Provision Coverage Ratio (PCR) was maintained at a healthy 98.3%. Profitability metrics also strengthened, with the Net Interest Margin (NIM) for FY25 improving by 8 basis points year-on-year to 4%, and the Return on Assets (ROA) increasing by 25 basis points to 1.75%. The cost-to-income ratio also saw a 22 basis points reduction to 38.5%.
Strategic Branch Expansion and Core Business Focus
The bank emphasized that its growth is primarily driven by its core branches, with new business largely originating from existing and newly opened branches. Over the last three years, the bank opened over 500 branches and plans to open another 1,000 branches in the next five years, at a rate of 200-220 per year. This strategy aims for sustainable growth, with a conscious effort to maintain asset quality and avoid aggressive third-party sourcing.
Capital Adequacy and Future Capital Raise Plans
Bank of Maharashtra maintains a healthy capital position with a CRAR of 20.53% and CET1 of around 16%. The bank has received approval for a Qualified Institutional Placement (QIP) of ₹7,500 crore and long-term bonds of ₹10,000 crore. The management stated that the timing and mode of this capital raise would be decided during the year, with a key motivation being to reduce the Government of India's holding from the current 79.6% to below 75% as per SEBI requirements.
Segmental Growth and Infrastructure Exposure
The bank's RAM (Retail, Agri, MSME) segment showed healthy growth, with retail growing by 25% year-on-year, home loans by 30%, car loans by 47%, and gold loans by 56%. The corporate book also grew by 15% year-on-year, maintaining a RAM corporate ratio of 62.38%. The bank's exposure to the infrastructure sector is primarily in renewables and HAM (Hybrid Annuity Model) projects, with management focusing on profitable opportunities and high-quality borrowers.
Conservative Guidance for FY26
For the next financial year, the bank provided conservative guidance, aiming to maintain NIM at 3.75%, advances growth at around 17%, and deposits growth at around 14%. The bank also targets to maintain its CASA ratio above 50%, ROA at 1.75%, GNPA below 2%, and credit cost below 1%. The cost-to-income ratio is expected to be maintained below 40%, reflecting a continued focus on efficiency and profitability.