Bank of Maharashtra eyes 25-30% jump in net profit in FY23

State-run Bank of Maharashtra is eyeing a 25-30 per cent growth in its net profit in the current financial year, aided by a healthy growth in net interest income (NII) and fall in provisions for bad assets. In the fiscal ended March 31, 2022, the Pune-based lender reported an over two-fold jump in its profit after tax (PAT) at Rs 1,152 crore, as against Rs 550 crore for the year ended March 2021.

"Our net profit will increase further this fiscal. Last year we had made more provisioning from our operating profit to improve our asset quality. So we have reached the bottom, with net NPA below one per cent and gross NPA lower than 4 per cent. Now, more provisioning (for bad loans) may not be required, which will automatically improve our net profit… I think a 25-30 per cent growth in net profit over the previous year’s will be there this fiscal," its Managing Director and Chief Executive Officer A S Rajeev told  PTI in an interview.

"We are optimistic to scale up NII (in FY2023) on account of strong business growth and good asset quality with a target of more than 20% rise over FY2022 to around ₹7,500 crore," he said.

NII grew by 23.42% on a year-on-year basis to ₹6,044 crore in FY2022, as against ₹4,897 crore in FY2021.

In addition, Bank of Maharashtra will focus on additional routes to increase profitability, such as further issuances of Priority Sector Lending Certificates (PSLCs). Because of the issuing of PSLCs, the lender was able to improve its operating profit by ₹250 crore last year, he said.

Net Interest Margin (NIM) during the year is expected to be above 3%.

In the previous fiscal, the bank's gross NPA declined to 3.94% from 7.23%. Net NPA reduced to 0.97%, as against 2.48% in FY2021.