Bank of Maharashtra net dips 12.78 per cent to Rs 51.89 cr

Bank of Maharashtra net dips 12.78 per cent to Rs 51.89 cr

Geeta Nair

Pune, June 26: The Bank of Maharashtra (BoM) has posted a 12.78 per cent decline in its net profit from Rs 56.29 crore in 1997-98 to Rs 51.89 crore in 1998-99. Non-performing assets (NPAs) of the bank mounted to Rs 716 crore for the year ended March 1999 as against Rs 709 crore last year. This represents an increase of 8.72 per cent from 8.66 per cent last year.Announcing the annual results of the bank on Thursday, the Bank of Maharashtra chairman and managing director MM Vaish said, "This year the highest priority is for recovery and management of NPAs and the bank would be taking specific steps to improve recoveries." He indicated that the bank desired to bring down the NPAs to about 5.67 per cent. Vaish also said that the bank would go in for a Rs 100 crore bond issue by way of private placement in the second quarter of this financial year. The issue is for strengthening capital adequacy. Vaish attributed the dip in profit to poor offtake of credit, higher incidence of NPAs and provision for wagerevision. Nearly 53 per cent of the NPAs were caused by priority sector lending of the bank which stood at 46.06 per cent against the Government norm of 40 per cent.

During year 1998-99, the bank also wrote off its accumulated losses of Rs 418.18 crore against its capital. Subsequently, the capital has come down from Rs 748.69 crore as on March 31, 1998 to Rs 330.51 crore now.The bank intends to improve the reporting systems from branches regarding loans and NPAs above Rs 25 lakh, refine the compromise policies to increase inflow of money among other measures. Vaish also said that they were considering the involvement of an outside agency for dealing with recoveries.The bank has made ambitious business plan for the current year during which it is targeting a 28 per cent growth in deposits, 44 per cent expansion of credit and a net profit of Rs 70 crore for year 1999-2000. "Low deployment of funds has been a major problem and we will make efforts to divert funds for credit rather than investments," Vaishsaid. The bank was wooing the top corporates for credit expansion. The bank is also planning to double its forex business from the existing Rs 2,600 crore and get more active in the secondary market in trading securities.

During the year 1998-99, the aggregate deposit of the bank touched Rs 10,760 crore, registering a rise of 19.30 per cent over last year's Rs 9,019 crore. Net addition in deposits was Rs 1,714 crore. Net credit of the bank rose by 13.06 per cent from Rs 3,592.61 crore to Rs 4,061.84 crore. Operating profit during the year rose by 8.85 per cent to Rs 135.08 crore from Rs 124.10 crore. The bank's capital adequacy ratio was 9.76 per cent. After a gap of seven years, BoM has transferred Rs 10.38 crore to the Government as return on investment.

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