Bank of Maharashtra Reports 36% Profit Growth in FY25 with Low NPAs

Rahul Chaudhary

1 month ago

Table of Contents

Bank of Maharashtra FY25 Results: Strong Growth, Clean Books, and Smart Expansion
Key Growth Areas and Business Mix
Risk Control and Asset Monitoring
Expansion Plans and New Projects
FY26 Outlook and Targets
Capital Plans and Regulations
- Fundraising Plans
- Dividend and Board Structure
Sector View and Market Conditions
Key Highlights to Remember
Conclusion
Frequently Asked Questions (FAQs)

Bank of Maharashtra FY25 Results: Strong Growth, Clean Books, and Smart Expansion

Bank of Maharashtra ended the financial year FY25 with strong numbers. The bank showed solid growth in business, improved asset quality, and better profits. It also expanded its network and made smart changes in strategy to prepare for the future.

Business Growth in FY25

Bank of Maharashtra grew well across all areas this year. The bank’s total business went up by 15.3% compared to last year. It reached ₹5.47 lakh crore.

Deposits rose by 13.4%, reaching ₹3.07 lakh crore.
Loans (advances) increased by 17.8% to ₹2.40 lakh crore.
The bank earned ₹2,520 crore in operating profit in Q4, which is 14% more than the same quarter last year.
Full-year net profit stood at ₹5,520 crore, up by 36% from last year.

The management said they were happy with the steady growth and how well the bank performed in every area.

Improved Asset Quality

Bank of Maharashtra kept its loan book clean.

Gross Non-Performing Assets (GNPA) fell to 1.74% from 2.47% a year ago.
Net NPA dropped to just 0.18%.
The bank maintained a high Provision Coverage Ratio (PCR) at 98.3%, which means it has kept enough funds aside for bad loans.
Overall stress on assets came down by 1.29% to 3.42%.
Only 2% of loans were in early stress (SMA-1 and SMA-2), and large stressed accounts over ₹5 crore were just 0.11%.

This shows that Bank of Maharashtra is managing risks carefully and is focused on good loan quality.

Profitability and Efficiency

Bank of Maharashtra’s profits and efficiency also improved.

Net Interest Margin (NIM) for FY25 was 4.0%, slightly higher than last year.
In Q4 alone, NIM stood at 4.01%.
Return on Assets (ROA) improved to 1.75%.
The cost-to-income ratio improved to 38.5%, showing the bank is controlling costs better.
Yield on advances, which shows how much the bank earns from loans, went up to 9.3%.

These numbers point to better earnings and smart cost control.

Strong Capital and Liquidity

Bank of Maharashtra is in a healthy position in terms of capital and liquidity.

CET1 (core equity capital) is around 16%.
Overall CRAR (capital to risk assets ratio) is 20.53%.
Liquidity Coverage Ratio (LCR) is 127%, which means the bank has enough liquid assets to handle short-term stress.
Government holding is now at 79.6%, and the bank plans to bring it down to meet SEBI’s 75% public float rule.

Key Growth Areas and Business Mix

RAM Segment and Loan Growth

Bank of Maharashtra’s loan book is well-balanced.

The Retail, Agriculture, and MSME (RAM) segment makes up 62.4% of the loan book. The rest is corporate.
Retail loans grew 25% in FY25.
- Home loans rose 30%
- Car loans increased by 47%
- Gold loans jumped 56%

Corporate loans also went up by 15%. The bank is careful in this segment, focusing on high returns and good credit quality.

Branch Network and Business Strategy

Bank of Maharashtra has opened more than 500 new branches in the past 3 years.
The board has cleared plans for 1,000 more, with 200–220 expected in FY26.
The bank mostly relies on its own branches for business. It uses very few direct sales agents (DSAs).
The pool buyout/DA book stood at ₹12,998 crore, down from ₹14,045 crore last year.

This shows the bank is growing from within and keeping control over loan quality.

CASA Growth

The Current Account Savings Account (CASA) ratio reached 53.3% in Q4, up from 49.3% in Q3.
Some of this growth came from seasonal factors and delayed government payments due to elections.

A high CASA ratio means the bank gets a large part of its funds at low cost, which helps improve profits.

Risk Control and Asset Monitoring

Bank of Maharashtra is using stronger checks to avoid risky loans.

For retail loans, the bank now has a minimum credit score requirement.
Restructured loans went up by ₹439 crore, due to two infrastructure projects getting more time to complete. Both are low-risk.
The bank also kept ₹1,200 crore as a COVID buffer, which was not touched during the quarter.

These steps show the bank is staying cautious and prepared.

Expansion Plans and New Projects

Branch Expansion and Planning

The bank will continue to open new branches and is working with consultants to plan this better.

GIFT City Presence

Bank of Maharashtra has got approval to open a branch at GIFT City.
The branch is expected to start operations in FY26.
This move will help the bank offer global banking services and keep key clients for the long term.

Hiring and Governance

The bank is hiring experts in technology, risk, and governance.
Focus is on long-term growth with better controls and skilled people.

FY26 Outlook and Targets

Bank of Maharashtra has set the following goals for FY26:

Area	Target
NIM	~3.75%
Advances	~17% growth
Deposits	~14% growth
CASA Ratio	Over 50%
ROA	Around 1.75%
GNPA	Under 2%
Credit Cost	Below 1%
Cost-to-Income Ratio	Below 40%

The bank is cautious because some loans (37%) are linked to the External Benchmark Lending Rate (EBLR). If RBI cuts the repo rate further, income may drop, and targets may change.

Capital Plans and Regulations

Fundraising Plans

The bank has approvals to raise:
- ₹7,500 crore via QIP (Qualified Institutional Placement)
- ₹10,000 crore through long-term bonds
Fundraising will depend on market conditions and approvals from the government and shareholders.
The bank also plans to reduce government stake gradually to meet SEBI rules.

Dividend and Board Structure

A 15% dividend has been proposed, which will be decided in the AGM.
The board currently lacks two independent directors. This is under review with the government and is common in the banking sector.

Sector View and Market Conditions

Focus on Infra Lending

Bank of Maharashtra is lending more to infrastructure projects such as:

Renewable energy
HAM road projects
Lease Rental Discounting (LRDs)

Economic View

The bank is optimistic due to strong GST collections, infrastructure push, and overall economic activity.
Corporate loan processing time has also improved.
No major stress areas have been flagged by the bank.

Investment Portfolio

The bank has unrealized gains of ₹348 crore in its AFS (Available for Sale) portfolio.
The timing to sell will depend on interest rate changes.

Key Highlights to Remember

Consistent growth and profits across the board
Very low bad loans and strong risk controls
Growing branch network and low use of third-party sales
Cost efficiency maintained despite expansion
Preparing for global operations with GIFT City branch
Investing in skilled staff and better systems

Conclusion

Bank of Maharashtra had a strong FY25, with high growth, clean books, and solid profits. The bank is growing mainly through its branches and internal teams. Its focus on safe lending, cost control, and smart expansion puts it in a good position for FY26. The bank’s management is positive but also staying careful as the interest rate environment may change.