Bank of Maharashtra (MAHABANK) Q4 05/06 earnings summary

Executive summary

• FY05-06 net profit fell to Rs. 50.79 crore from Rs. 177.12 crore, primarily after Rs. 185.11 crore of investment depreciation provision; operating profit was Rs. 365.07 crore vs Rs. 546.46 crore.

• Deposit repricing and reduced investment exposure supported a shift toward low-cost funding and advances growth, while total deposits declined after high-cost term deposits were shed.

• The Board declared a 4% dividend for FY05-06.

Financial highlights

• Total income was Rs. 2,526.69 crore vs Rs. 2,752.93 crore; interest earned was Rs. 2,349.45 crore vs Rs. 2,367.69 crore.

• Other income declined to Rs. 177.23 crore from Rs. 385.23 crore; operating expenses fell to Rs. 658.72 crore from Rs. 720.43 crore.

• Net profit was Rs. 50.79 crore vs Rs. 177.12 crore; basic EPS was Rs. 1.18 vs Rs. 4.11.

• Net advances rose 26.09% to Rs. 16,469.72 crore; total deposits fell to Rs. 26,906.19 crore from Rs. 28,844.17 crore.

Outlook and guidance

• Core banking solution BANCS was finalized, with 100 branches targeted to be operational by March 2007; 559 rural and semi-urban branches were also planned for computerization by then.

• Plans included 200 additional ATMs by September 2006 and strategy changes focused on core activities, all-round growth and shareholder value.