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Bank of Maharashtra expects solely Rs 1,000-1,500 crore mortgage e-book to be restructured

MUMBAI: State-run Bank of Maharashtra is anticipating solely Rs 1,000 to 1,500 crore of its complete advances to return up for one-time restructuring below the Reserve Bank of India’s scheme earlier than December 31, its managing director and CEO A S Rajeev stated.

The lender had earlier estimated round Rs 3,000-4,000 crore from its moratorium e-book to return below one-time restructuring. However, over a time period the moratorium e-book itself got here down drastically from 27 per cent in March to 15-16 per cent (Rs 14,000-15,000 crore) as of finish August, he stated.

“We had earlier expected that 15-20 per cent of the total moratorium book will go for restructuring. But now we think only Rs 1,000-1,500 crore from our total advances will come up for restructuring,” Rajeev advised .

The financial institution’s complete advances stood at Rs 1,03,408 crore as on September 30, 2020.

In August, the Reserve Bank of India had introduced one-time restructuring for private and company debtors affected by COVID-19 associated stress. Under the scheme, the decision must be invoked by December 31, 2020.

So far, the lender has restructured 800 small accounts, together with MSMEs, value Rs 40 crore, below the scheme.

“There are one or two bigger accounts worth Rs 150-200 crore in the pipeline (for restructuring). These are consortium lending accounts and the decision on restructuring will be taken by respective leaders,” he stated.

In the quarter ended September 30, 2020, the Pune-based financial institution reported a 13.44 per cent progress in its standalone revenue after tax at Rs 130 crore as in opposition to Rs 115 crore in the identical quarter of the earlier fiscal.

On a consolidated foundation, its web revenue stood at Rs 130.44 crore within the second quarter of FY21, in comparison with Rs 115.15 crore final 12 months in the identical quarter.

The progress in revenue was on account of upper web curiosity revenue, decrease unhealthy mortgage provisioning and discount in working bills.

“Last (Q2FY21) quarter was comparatively very good. I am sure that our numbers would be better in the next quarter as compared to the September quarter because we have already made provisioning of more than Rs 1,000 crore related to COVID or for any kind of emergency,” Rajeev stated.

The lender doesn’t foresee any problem by way of provisioning until March 31, 2021.

During the primary half of the present fiscal, the lender’s recoveries stood at Rs 678 crore and it expects to get well one other Rs 1,000 crore throughout the second half, Rajeev stated.

In the April-September interval, the financial institution settled value Rs 225-250 crore of accounts below its one-time settlement schemes (OTS) and has recovered virtually 60 per cent from these accounts. It expects some extra recoveries from such accounts earlier than March 31, 2021.

In the second half, it expects round Rs 250 crore to Rs 300 crore settlement below OTS.

The lender’s gross NPA lowered to eight.81 per cent within the September quarter from 16.86 per cent final 12 months. Net NPA declined to three.30 per cent as in opposition to 5.48 per cent in the identical quarter of the earlier fiscal.

Rajeev stated he expects gross NPA to be under 8 per cent and web NPA decrease than three per cent by March-end.

He sees an addition of no more than Rs 500-600 crore in NPAs every in Q3 and This autumn of the present fiscal.

In the primary half, the financial institution’s deposits grew at 12.15 per cent year-on-year and advances at 13 per cent throughout the first half and it expects the identical pattern within the second half additionally.

“We are of the view that the total deposits may grow at around 12-14 per cent and advances may grow at 14-16 per cent in the second half,” he stated.

Capital adequacy of the financial institution stood at 13.18 per cent with frequent fairness tier 1 ratio of 10.31 per cent as on end-September. It has already acquired board approval for elevating Rs 3,000 crore, which incorporates Rs 2,000 crore by fairness and Rs 1,000 crore from bonds.

“We may raise funds through bonds (AT1 and tier II) during the second half in various tranches. We don’t have AT1 bonds at present so we will raise Rs 400-500 crore of such bonds. We will also raise Rs 400-500 crore tier II bonds, if required. With this our capital adequacy position will be above 14 per cent for the current year,” Rajeev stated including that the choice on elevating fairness capital will probably be taken within the subsequent 12 months.

He stated the financial institution might not require any capital infusion from the federal government on this fiscal.

The lender has additionally entered into the bank card enterprise and has already issued shut to five,000 playing cards. It is trying to broaden its base into the phase from the fourth quarter of the present fiscal, Rajeev added.

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