Bank of Maharashtra shares gain 19% on cost saving strategy

Moneycontrol BureauShares of Bank of Maharashtra zoomed to 52-week high of Rs 38.70, up nearly 19 percent intraday Tuesday on strategy of lowering operational cost.CNBC-TV18 had reported, quoting news agency Cogencis, that the bank will merge as many a 450-500 loss making branches as well as cut zonal offices in the next financial year. The bank’s executive director RK Gupta confirmed the report and told CNBC-TV18 that the aim of the strategy is to boost operating profits by cutting operating expenditure, and ease capital. The exercise to identify the branches to be merged is still underway and there are no plans to merge rural branches, Gupta informed. There are around 1,940 branches and around 300 branches are loss-making ones, he added.Earlier this month, the bank had slashed its benchmark lending rate by up to 0.2 percent. The bank reduced marginal cost of funds based lending rate (MCLR) across various tenures, the lender said in a regulatory filing.Meanwhile, the bank also posted a net loss of Rs 182.51 crore for the third quarter ended December 31, 2016 against profit of Rs 89.06 crore in year-ago period, on account of higher provisioning for bad loans.The stock has seen very strong movements in the past one month, having risen nearly 27 percent in the past one month. In fact, in the past three days, it rose over 12 percent.At 15:00 hours IST, Bank of Maharashtra was quoting at Rs 36.95, up Rs 4.40, or 13.52 percent on the BSE. It touched a 52-week high of Rs 38.70.