Bank of Maharashtra

Bank of Maharashtra reported a consistent Q1 FY26 performance, maintaining a trend seen over the last 3-4 years. Total business grew 15% year-on-year to INR 5.46 lakh crore, adding INR 70,000 crore. This growth is supported by strategic branch expansion, with a plan to open 321 branches in the next 18 months, and entry into new geographies. The bank also highlighted its leadership in 18 out of 26 key financial parameters among peers in March 2025.

Despite repo rate cuts impacting 40% of its loan book (18-19 bps reduction), the bank maintained a strong NIM of 3.95% in Q1 FY26, down slightly from 4% at FY25 end. This was achieved by a sequential reduction in the cost of deposits and maintaining a CASA ratio above 50% (53% at FY25 end, 14 bps YoY improvement). Strategic avoidance of high-cost bulk deposits and ongoing MCLR resets (35 bps increase over 12 months, with 20-30% still to be repriced) further cushioned NIM contraction.

The bank demonstrated robust asset quality with NNPA at 0.18% and a high Provision Coverage Ratio (PCR) of 98.36%. While slippages increased to INR 727 crore in Q1 FY26, 47% (INR 343 crore) originated from the cyclical agriculture segment, with INR 240 crore already upgraded. SMA-2 numbers rose to INR 171 crore from INR 40 crore, but SMA-1 reduced from INR 214 crore to INR 114 crore, indicating active management and shifts between categories.

Bank of Maharashtra is fast-tracking its digital initiatives, with a revamped mobile banking application expected to launch in approximately one month, aiming for a world-class experience. The bank also secured regulatory approval for a GIFT City International Banking Unit (IBU) within five months and plans to commence business there in Q2 FY26. This IBU is expected to open global opportunities, enhance customer stickiness, and drive new business growth.

The bank improved its cost-to-income ratio to 37.57% in Q1 FY26, down from 38% last year, staying well below its guidance of 40%. This efficiency is maintained despite adding around 850 employees, as new branches in growth centers are expected to generate offsetting revenues. The Capital to Risk-weighted Assets Ratio (CRAR) stands strong at 20.5%, well above the guidance of 18%, indicating no immediate need for capital raising, though Board approval for INR 7,500 crore debt plus equity is in place for opportune timing.

Treasury operations contributed significantly, with profit increasing to INR 625 crore in Q1 FY26 from INR 360 crore in Q1 FY25. Domestic profit from treasury rose from INR 37 crore to INR 141 crore, and an additional INR 104 crore came from mutual funds, with forex profit adding INR 40 crore. The bank also saw reclassification impacts, with ATL Gold Loans (under INR 2 lakh collateral) moving from Agri to Retail, and some co-lending MSME portions moving to non-priority retail due to regulatory clarity, leading to Q-o-Q declines in these segments.