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Analyst Meet / AGM - Analyst Meet

Expects loan growth at 12-13% for FY2016

Bank of Maharashtra

20-May-2015, 05:45
Bank of Maharashtra conducted an analyst meet on 20 May 2015 to discuss the financial results for the quarter ended March 2015 and prospects of the bank. Sushil Muhnot CMD of the bank addressed the meet:
Highlights:

As per the bank, global economic conditions continue to be challenging. However, the bank is observing some signs of improvement for the domestic economy. Nevertheless, bank expects first two quarters of FY2016 to be challenging.

Business of the bank increased 7.8% in FY2015 driven by 12% growth in advances, while deposits moved up 4.5%. Bank has utilized borrowing and refinancing window to fund loan growth, which has weighed up on deposits growth.

Bank has targeted the loan growth of 12-13% for FY2016. As per the bank, its retail book stands at 12% of the loan book much below banking sector average of 17-18%. Thus, bank sees scope for raising scope for retail loan book share supporting the loan growth

CASA deposits increased 8% gaining the share to 37.1% at end March 2015 from 35.9% at end March 2014. Bank sees scope for further improvement in CASA ratio. Bank proposes to deepen customer relationship. Bank has appointed relationship managers to take care of high value accounts.

Restructured advances of the bank stood at Rs 7234 crore, of which Rs 2200 crore related to state electricity boards guaranteed by the state governments. Thus, bank has to monitor rest of the restructured advances of Rs 5000 crore, to look at opportunities for upgradations and avoid slippages.

Fresh slippages of advances declined in Q4FY2015 to Rs 1010.62 crore from Rs 2340.77 crore in Q3FY2015. As per the bank, the fresh slippages are stabilizing and are likely to remain lower.

Bank has improvement Net Interest Margin (NIM) to 2.81% in FY2015 from 2.71% in FY2014. Reduction in bulk deposits and decline in cost of deposits has contributed to the NIM improvement. Bank proposes to further reduce high cost deposits.

Bank has fully met the employee wage hike related provisions.

Bank has improved CRAR ratio to 11.95% driven by issuance of common equity capital of Rs 400 crore to LIC, raising of Tier I capital bonds of Rs 1000 crore and conversion of preference shares of Rs 588 crore.