BoM tops PSBs list in Q2 for loan and saving deposits growth

Mumbai: State-owned Bank of Maharashtra (BoM) has emerged as the top performer among state-run lenders in terms of loan and savings deposit growthduring the second quarter of the current financial year.

The Pune-headquartered lender recorded an 11.46 per cent increase ingross advances at Rs1,15,236 crore in the July-September period of2021-22, according to the published data of BoM. It was followed byPunjab and Sindh Bank which posted 9.53 per cent growth in advances withaggregate loans at Rs 67,574 crore at the end-September, as per datafrom the bank's quarterly results.

Taking to Bizz Buzz, Mangesh Kulkarni, research head, Almondz GlobalSecurities, said: "The bank has been doing very well under theleadership of its CMD, AS Rajeev, who was given extension recently."First, it came out of PCA nearly one and half years ago and then it hasbeen performing very well for past 5-6 quarters."I do hope that the bank will continue to do well in the futuretoo," he added.

In terms of RAM (retail, agriculture and MSME) segment, the bankregistered a highest growth rate of 14.24 per cent at Rs 70,515 crore.When it came to deposit mobilisation, BoM with a 14.47 per cent growthwas a notch behind NSE -1.43 per cent, while the country's largestlender SBI recorded an 9.69 per cent rise.However, in absolute terms, SBI's deposit base was 20 times higher atRs 36.90 lakh crore as against Rs 1.81 lakh crore of BoM. Currentaccount, savings account (CASA) for BoM saw a 22 per cent rise, thehighest among the public sector lenders, during the quarter. As aresult, CASA was 54 per cent or Rs 97,889 crore of the total liabilityof the bank. Total business of BoM increased 13.27 per cent to Rs 2.97lakh crore as on end-September. For the second quarter, BoM'sstandalone net profit more than doubled to Rs 264 crore as against Rs130 crore in the same period a year ago.

In fact, credit rating agency ICRA has upgraded the bank's rating fromA+ three years ago to AA- now. For starters, it means that 'low riskdefault'.Giving the rationale behind its rating upgrade for the bank, ICRA saysthat 'the rating upgrade factors in the improvement in bank's solvencyprofile, capital position and profitability, which is likely tosustain going forward in our view. Theimprovement was driven by thereducing legacy stressed assets and the consequent improvement in thecore operating profitability and net operating profitability, which islikely to continue going forward. The rating also considers themajority sovereign ownership of BoM and its above-average resourceprofile, supported by an established retail network with a strongpresence in Maharashtra. The bank has a fairly high level of low-costcurrent account and savings account (CASA) deposits, which translatesinto a granular deposit base and competitive cost of funds. This isexpected to support a steady improvement in its operatingprofitability. The Stable outlook on the rating factors in ICRA'sexpectations that BoM will largely be able to absorb incrementalcredit losses through its operating profits while continuing toimprove its asset quality and solvency position and maintainsufficient capital cushion over the regulatory levels.

During the quarter, the bank had written off bad loans worth Rs 1,100crore. In terms of RAM (retail, agriculture and MSME) segment, thebank registered a highest growth rate of 14.24 per cent at Rs 70,515crore. Agencies Punjab and Sindh Bank.The bank's share was trading at Rs 20.15 at the closing hours of November 17.