{"id":163069,"date":"2024-07-15T10:13:07","date_gmt":"2024-07-15T14:13:07","guid":{"rendered":"https:\/\/44.250.171.167\/?p=163069"},"modified":"2024-07-15T10:13:08","modified_gmt":"2024-07-15T14:13:08","slug":"bank-of-maharashtra-ltd-q1-fy25-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/bank-of-maharashtra-ltd-q1-fy25-earnings-conference-call-insights\/","title":{"rendered":"Bank of Maharashtra Ltd Q1 FY25 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Bank of Maharashtra Ltd (MAHABANK) Q1 FY25 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>Business Growth<\/strong>\n<ul>\n<li>Total business saw 13.5% year-over-year growth, reaching INR4.76 lakh crores.<\/li>\n<li>Advances grew by 19%, standing at INR2.09 lakh crores.<\/li>\n<li>Total deposits increased by 9% year-over-year, reaching INR2.67 lakh crores.<\/li>\n<li>CASA deposits experienced growth, with current accounts up 10% and savings accounts up 6%.<\/li>\n<li>Term deposits showed a 12% year-over-year increase.<\/li>\n<li>CASA share stood at 50% of total deposits.<\/li>\n<li>Different loan segments showed strong growth: retail, 25%; agriculture, 15%; MSME, 20%; and corporate, 39%.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Deposit Initiatives<\/strong>\n<ul>\n<li>Created a new business acquisition vertical headed by a general manager to target government departments and entities.<\/li>\n<li>Implemented special deposit schemes with competitive interest rates to retain existing deposits and attract new customers.<\/li>\n<li>Focused on adding new KYC IDs (Know Your Customer Identification) through these schemes.<\/li>\n<li>Established a dedicated cell to address integration requirements for bulk transactions and API connections with client ERPs.<\/li>\n<li>Aiming to deepen existing relationships and establish new ones through targeted outreach.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Digital Enhancements<\/strong>\n<ul>\n<li>Upgrading the mobile banking app with new features.<\/li>\n<li>Planning to revamp the entire mobile application to offer a lifestyle banking solution.<\/li>\n<li>Using digital channels to ease customer onboarding and increase engagement.<\/li>\n<li>Bank has a technology budget of approximately INR1000 crores for the current year.<\/li>\n<li>Upgraded data center, disaster recovery, and near-DR facilities.<\/li>\n<li>Implementing new solutions for CRM, lifestyle banking, and Microsoft suite.<\/li>\n<li>Enhancing audit capabilities with 19 modules to be implemented in the next six months.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Loan Portfolio Expansion<\/strong>\n<ul>\n<li>Exploring co-lending partnerships with high-rated NBFCs to strengthen the portfolio.<\/li>\n<li>Seeking partnerships with term lending institutions for infrastructure funding, particularly in renewable energy projects.<\/li>\n<li>Creating centralized verticals for loan processing, underwriting, and monitoring to improve oversight and asset quality.<\/li>\n<li>Revamping retail loan schemes to make them more market-friendly while addressing risks.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Recovery Efforts<\/strong>\n<ul>\n<li>Set a target of INR1,250-1,500 crores for recovery from the write-off book this year.<\/li>\n<li>Implemented an NDND (Non-Discretionary Non-Discriminatory) scheme for one-time settlements of NPAs up to INR1 crore.<\/li>\n<li>INR8000 crore portfolio eligible under the NDND scheme, covering 6.18 lakh NPA accounts.<\/li>\n<li>Planning a mega auction of over 500 properties acquired through physical possession.<\/li>\n<li>Expecting a 20-25% success rate in property auctions from physical possessions.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Business Growth Guidance<\/strong>\n<ul>\n<li>Total business expected to grow by 16% for the current year.<\/li>\n<li>Advances projected to increase by 18-20%.<\/li>\n<li>Deposits targeted to grow by 12-15%.<\/li>\n<li>CASA ratio to be maintained around 50%.<\/li>\n<li>Retail, Agriculture, MSME to Corporate ratio aimed at 60:40 with a \u00b12% variation.<\/li>\n<li>Interest income growth projected at 18-20%.<\/li>\n<li>NIM guidance set at 3.75-3.9%.<\/li>\n<li>Cost to income ratio to be maintained below 40%.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Investment Portfolio Changes<\/strong>\n<ul>\n<li>Market risk-weighted assets decreased from 7,500 crores to 426 crores due to regulatory changes.<\/li>\n<li>New investment guidelines prevent shifting securities from Held to Maturity to Available for Sale.<\/li>\n<li>Banks can no longer sell high-yielding securities from HTM to AFS for trading profits.<\/li>\n<li>Interest income from treasury has increased while trading profit has decreased.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Yield on Advances<\/strong>\n<ul>\n<li>Slight decline in yield on advances observed quarter-on-quarter.<\/li>\n<li>Decline primarily attributed to regulatory changes regarding penal interest.<\/li>\n<li>Penal interest now classified as charges rather than interest income.<\/li>\n<li>Overall impact on yield described as minor with no other specific reasons for the decline.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Agri Portfolio<\/strong>\n<ul>\n<li>Agriculture advances showed 35% growth.<\/li>\n<li>Sector experiences high stress levels and NPAs, but on a reducing trend.<\/li>\n<li>Current NPA level in agriculture portfolio at 7.88%.<\/li>\n<li>Bank shifting focus from farm credit to investment credit.<\/li>\n<li>New focus areas include cold storages and food processing units.<\/li>\n<li>Aiming for a balanced approach to control stress while maintaining growth in the sector.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Infrastructure Provisioning<\/strong>\n<ul>\n<li>New RBI circular on infrastructure provisioning to be implemented from 2025 to 2027.<\/li>\n<li>Estimated additional provisioning of INR490 crores required over three years.<\/li>\n<li>Bank considering options to pass on costs to customers through interest rate increases.<\/li>\n<li>Potential interest rate increase of 0.4% to 0.5% for loans in under-construction phase.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Business Growth Strategy<\/strong>\n<ul>\n<li>Q1 performance considered muted but not a cause for concern.<\/li>\n<li>Year-on-year credit growth at 19% despite challenges.<\/li>\n<li>Bank aims to become more significant by exploring new opportunities and sectors.<\/li>\n<li>Focus on retail advances and infrastructure sectors like renewables.<\/li>\n<li>Recent recruitment of 195 specialist officers to strengthen risk management, treasury, and technology.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Capital Adequacy<\/strong>\n<ul>\n<li>Capital Adequacy Ratio stands at 17.04%, above regulatory requirements.<\/li>\n<li>Recent capital raise of INR1000 crores on July 4th boosted CAR to 17.7%.<\/li>\n<li>Increase in credit and operational risk weighted assets observed.<\/li>\n<li>Market risk weighted assets decreased significantly due to new investment guidelines.<\/li>\n<li>Bank maintains a comfortable capital position despite not raising capital in the reported quarter.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Bank of Maharashtra Ltd (MAHABANK) Q1 FY25 Earnings Concall Business Growth Total business saw 13.5% year-over-year growth, reaching INR4.76 lakh crores. Advances grew by 19%, standing at INR2.09 lakh crores. Total deposits increased by 9% year-over-year, reaching INR2.67 lakh crores. CASA deposits experienced growth, with current accounts up 10% and savings accounts [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":162998,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,1],"tags":[151,10169,8265],"class_list":["post-163069","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-finance-stocks","tag-banking","tag-earnings","tag-finance"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2024\/07\/CC_Image_8.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":160644,"url":"https:\/\/alphastreet.com\/india\/bank-of-maharashtra-ltd-q4-fy24-earnings-conference-call-insights\/","url_meta":{"origin":163069,"position":0},"title":"Bank of Maharashtra Ltd Q4 FY24 Earnings Conference Call Insights","author":"Praveen","date":"April 29, 2024","format":false,"excerpt":"Key highlights from Bank of Maharashtra Ltd (MAHABANK) Q4 FY24 Earnings Concall Credit Underwriting Implemented minimum benchmark credit scores for loan underwriting. 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