Yahoo Finance Bank of Maharashtra (BOM:532525) Q2 2025 Earnings Call Highlights: Robust Growth in Net Profit ...
Total Business Growth: 17% YoY.
Total Advances Growth: 19% YoY.
Total Deposits Growth: 15% YoY.
CASA Growth: 12% YoY, with an addition of INR 15,000 crores.
Retail Loan Growth: 23% YoY.
Agriculture Loan Growth: 34% YoY.
MSME Loan Growth: 25% YoY.
Corporate Book Growth: 9% YoY.
Gold Loan Growth: 60% YoY.
Gross NPA (GNPA): Improved to 1.84% from 2.19% YoY.
Net NPA (NNPA): 0.2%.
Total Recovery: INR 475 crores.
Provision Coverage Ratio (PCR): 98.31%.
Credit-Deposit (CD) Ratio: 78.72%.
Net Interest Income Growth: 15% YoY, with an addition of INR 375 crores.
Net Interest Margin (NIM): 3.98%.
Operating Profit Growth: 15% YoY, at INR 2,203 crores.
Net Profit Growth: 44% YoY, with an addition of INR 406 crores, totaling INR 1,326 crores.
Return on Assets (ROA): Improved by 36 basis points to 1.74%.
Return on Equity (ROE): 26.01%.
CET1 Ratio: 12%.
CRAR: 17.26%.
Release Date: October 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Bank of Maharashtra (BOM:532525) reported a strong YoY growth in total business by 17% and advances by 19%.
The bank's CASA ratio remains robust at 50%, with a YoY growth of 12% in CASA deposits.
Asset quality has improved, with GNPA reduced to 1.84% from 2.19% a year ago, and NNPA at a low 0.2%.
Net profit saw a significant YoY increase of 44%, reaching INR 1,326 crores.
The bank is well-capitalized with a CET1 ratio of 12% and a CRAR of 17.26%.
Negative Points
The bank's SMA-2 book has increased significantly, raising concerns about potential future slippages.
Despite the overall growth, the corporate loan portfolio has shown a modest YoY growth of only 9%.
There is a conservative outlook on NIM due to potential rate cuts, with guidance set at 3.75% to 3.85%.
The bank's market share remains relatively small at 1.2%, primarily concentrated in Western India.
Operating expenses are high, impacting the cost-to-income ratio, which is currently at 38.8%.
Q & A Highlights
Q: Congratulations on surpassing guidance. Will you revise your targets for ROA and NIM? A: We are performing well on ROA and NIM, but remain conservative due to potential rate cuts. We maintain guidance of 3.75%-3.85% for NIM and 1.6%-1.65% for ROA.
Q: Can you explain the growth in gold loans? Is it due to rising gold prices? A: Gold loans have seen traction post-COVID. We have improved infrastructure for safekeeping and appraisal, and see significant growth potential. Our portfolio is INR13,000 crores, aiming for INR15,000 crores by year-end.
Q: What is the status of your corporate loan portfolio? Are you reducing exposure? A: We maintain a 60-40 RAM to corporate ratio. We are open to opportunities in sectors like infra and renewable energy, and will not miss emerging opportunities.
Q: Can you provide details on your co-lending book? A: Our co-lending book is nearing INR2,000 crores. We partner with AA-rated NBFCs, ensuring good NIM and digitized processes. We plan to expand partnerships and grow this high-yielding portfolio.
Q: How are you managing liquidity given the cash flow changes and bond issuances? A: We are comfortable with liquidity, supported by a sizable investment portfolio and recent capital raises. We have adequate CRR and SLR, ensuring well-managed liquidity.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
