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, Financial) 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.
