Bank of Maharashtra plans Rs 500-750 cr QIP in Feb, Q3 net up over twofold

Kolkata: State-owned Bank of Maharashtra will be raising Rs 500-750 crore in qualified institutional placement in February, the bank's managing director AS Rajeev said, while announcing 111 per cent rise in net profit at Rs 325 crore for the December quarter.

"Some local institutional investors have shown interest in investing in our bank. This is why we are going for fundraising despite having a comfortable capital adequacy ratio at 14.85 per cent," Rajeev told ET. "We plan to conclude the equity raising by February 15."

It will be raising another Rs 1,000 crore in bonds after April, Rajeev said.

The equity inclusion will help it reduce the government stake by a tad from 91 per cent. According to market regulation, public shareholding in any listed entity should be a minimum 25 per cent.

Rajeev attributed the higher net profit to a rise in net interest income even as the provision to cover bad loans rose 52 per cent. Net profit for the December 2020 quarter was Rs 154 crore.

The lender's net interest margin (NIM), a key profitability parameter, was at 3.11 per cent for the quarter under review. NIM was 3.27 per cent in the September quarter and at 3.06 per cent in the year-ago period.

Its operating profit rose 28.2 per cent at 1,162 crore for the December 2021 quarter as against Rs 907 crore in the year-ago period. Net interest income grew by 16.9 per cent at Rs 1527 crore from Rs 1,306 crore over the same period.

The bank made Rs 587 crore bad loan provisions in the December quarter as compared with Rs 386 crore in the year-ago period, improving the provision coverage ratio to 93.77 per cent from 89.55 per cent. It holds a cumulative Covid-19 provision of Rs 1073 crore at the end of last year.

Its gross non-performing assets ratio dipped to 4.73 per cent at the end of December from 7.69 per cent a year back. Net NPA reduced to 1.24 per cent from 2.59 per cent over the same period.