State-owned Bank of Maharashtra on Tuesday said its net profit jumped
over four-fold to Rs 114.66 crore in the second quarter ended September
30, due to fall in bad loan proportion leading to decreased provisioning
requirement.
The bank had registered a net profit of Rs 27 crore in July-September quarter of the previous fiscal. Total
income of the bank during the second quarter of 2019-20 rose to Rs
3,295.91 crore, as against Rs 3,192.80 crore in same period of last
year, the bank said in a regulatory filing.
Asset quality of the
bank witnessed improvement with the gross non-performing assets (NPAs)
coming down to 16.86 per cent of the gross advances as on September 30,
2019 from 18.64 per cent as on September end, 2018.
In absolute value, the gross NPAs of the bank were of Rs 15,408.51 crore, down from Rs 16,872.84 crore. The net NPAs or bad loans were also trimmed to 5.48 per cent (Rs 4,406.56 crore) from 10.61 per cent (Rs 8,742.86 crore).
Provisions
for bad loans and contingencies came down to Rs 359.23 crore for the
September quarter from Rs 941.71 crore a year ago. The bank said
that during the quarter ended September 30, 2019, loans and advances
amounting to Rs 2,224.49 crore have been classified as fraud in terms of
RBI guidelines and bank holds 100 per cent provision in respect of such
advances.
Also, the bank said that since December 31, 2018, the
bank has made accelerated provision in respect of sub-standard accounts
from 15 per cent to 20 per cent and in respect of doubtful accounts from
40 per cent to 50 per cent as per the approved board policy in line
with RBI guidelines.
"In respect of certain loan accounts, there
is significant erosion of securities and/or chances of recovery are
bleak. Therefore, bank has made 100 per cent provision in respect of 17
accounts for the half year ended September 30, 2019.
"Total provision against these accounts is Rs 1,606.15 crore," it said.
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