Bank of Maharashtra (MAHABANK) Q4 07/08 earnings summary

Executive summary

• Total business grew 24.70% YoY to Rs.71,556 crore at 31 Mar 2008; net profit rose 20.80% to Rs.328.39 crore.

• Asset quality improved: gross NPAs fell to 2.57% from 3.50%, and net NPAs to 0.87% from 1.21%.

• Capital adequacy declined to 10.26% from 12.06%, partly due to the transition provision for employee benefits under revised AS 15.

Financial highlights

• Total income increased 27.91% to Rs.3,820.75 crore; interest income rose 30.07% to Rs.3,540.58 crore.

• Interest expense increased 42.02% to Rs.2,311.79 crore; operating expenses rose 32.61% to Rs.3,148.12 crore.

• Operating profit rose 9.69% to Rs.672.63 crore; net profit was Rs.328.39 crore versus Rs.271.84 crore.

• Deposits grew 23.11% to Rs.41,758 crore; gross advances rose 27.00% to Rs.29,798 crore.

• Investments increased 8.71% to Rs.12,283 crore; foreign exchange merchant turnover declined to Rs.14,244 crore from Rs.15,141 crore.

Outlook and guidance

• Management expected India to sustain healthy economic growth in the coming year despite global financial turmoil and slowdown in developed markets.

• Financial inclusion efforts targeted 20 Maharashtra districts and at least one block in each of the remaining 12 districts, with completion planned by June 2008.

• CBS expansion, internet/mobile/phone banking modules and planned ALM, AML and CRM modules formed part of the technology development agenda.