Release Date: January 16, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bank of Maharashtra (BOM:532525, Financial) reported a strong year-on-year growth of 17% in total business, reaching INR5.07 lakh crores.
- The bank's advances grew by 21% year-on-year, with a significant contribution from the retail segment, which saw a 24% growth.
- The bank maintained a healthy Net Interest Margin (NIM) of 3.98% and an improved Return on Assets (ROA) of 1.78%.
- Asset quality showed improvement with Gross Non-Performing Assets (GNPA) reducing to 1.80% and Net NPA at 0.20%.
- The bank successfully raised INR3,500 crores in capital, improving its CET1 ratio to 13.6% and CRAR to 18.71%.
Negative Points
- Corporate loan growth was subdued on a quarterly basis, with only a 4% increase, raising concerns about the bank's ability to capitalize on corporate sector opportunities.
- The bank's employee costs increased due to new hires and incentives, impacting overall expenses.
- There was a slight increase in Gross NPA in absolute terms, rising from INR4,009 crores to INR4,124 crores.
- The bank faces challenges in maintaining its CASA ratio amidst industry-wide declines in low-cost deposits.
- Concerns were raised about the insufficiency of independent directors, affecting the Audit Committee's functioning.
Q & A Highlights
Q: What is the outlook for corporate loan growth, given the subdued quarterly growth?
A: Nidhu Saxena, CEO, mentioned that while the private CapEx cycle is yet to pick up, the bank is focusing on sectors like infrastructure, renewable energy, and healthcare. Rohit Rishi, Executive Director, added that the year-on-year growth in the corporate book is around 17%, and they are confident about maintaining decent growth by focusing on sectors like renewables and infrastructure.
Q: How do you see the net interest margin (NIM) evolving, given the current deposit market conditions?
A: Nidhu Saxena explained that a significant portion of the loan book is linked to MCLR and repo rates, which will be impacted by rate cuts. However, the bank has been able to raise MCLR, which has helped increase interest income. They aim to maintain NIM between 3.70% to 3.90%, even with potential rate cuts.
Q: What are the current trends in home loan growth, and what are the expectations for the near term?
A: Home loans have grown by 29% year-on-year. Nidhu Saxena highlighted that the real estate sector has seen a reversal post-COVID, with reduced unsold inventory and new project launches. The bank's easy onboarding process and competitive pricing have contributed to this growth, which is expected to continue.
Q: How is the bank planning to enhance distribution fee income, particularly from life insurance?
A: The bank is focusing on digitizing parts of its wealth management business and plans to launch digital policy issuance with LIC. They aim to grow bancassurance business in a compliant manner and are also enhancing their 3-in-1 products with brokerage partnerships.
Q: What is the strategy for branch expansion, particularly in rural areas?
A: Nidhu Saxena stated that while regulatory guidelines are followed for rural branch openings, the focus is on potential growth centers. The bank plans to open 200 more branches by March 2025, with a strategy to create clusters of branches in growth centers to achieve critical mass.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
