BANK OF MAHARASHTRA 2022-23 Annual Report Analysis

Sun, 21 May

BANK OF MAHARASHTRA has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the bank during the year 2022-23.

BANK OF MAHARASHTRA Income Statement Analysis

• Interest income during the year rose 22.1% on a year-on-year (YoY) basis.
• Interest expenses were up by 17.0% YoY during the same period.
• Operating expenses increased by 1.9% YoY during the year.
• The bank's net interest income (NII) increased by 28.1% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 3.2% in FY23 as against 3.0% in FY22.
• Other income declined by 14.0% YoY during the year.
• Net profit for the year increased by 125.8% YoY.
• Net profit margins during the year increased to 16.4% in FY23 from 8.9% in FY22.

BANK OF MAHARASHTRA Income Statement – 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Interest Income	Rs m	130,193	158,986	22.1%
Other Income	Rs m	26,529	22,809	-14.0%
Interest Expense	Rs m	69,740	81,568	17.0%
Net Interest Income	Rs m	60,453	77,418	28.1%
Operating Expense	Rs m	38,500	39,225	1.9%
Pre-provision Operating Profit	Rs m	48,482	61,003	25.8%
Provisions & Contingencies	Rs m	36,965	34,975	-5.4%
Profit before tax	Rs m	19,557	34,456	76.2%
Tax	Rs m	8,041	8,429	4.8%
Profit after tax	Rs m	11,534	26,050	125.8%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	3.0	3.2
Net profit margin	%	8.9	16.4

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BANK OF MAHARASHTRA Balance Sheet Analysis

• The bank's deposits during FY23 stood at Rs 2,340.6 bn as compared to Rs 2,022.8 bn in FY22, thereby witnessing an increase of 15.7%.
• Advances for the year stood at Rs 1,712.2 bn as compared to Rs 1,311.7 bn during FY22, a rise of 30.5%.
• Cost of deposits for BANK OF MAHARASHTRA fell 3.8% and stood at 3.1%, while yield on advances rose to 6.7%.
• The lender's investments rose to Rs 690.4 bn during the year from Rs 687.6 bn in FY22.
• Borrowing stood at Rs 107.7 bn, a growth of 39.0% as compared to previous year.
• Overall, the total assets and liabilities for FY23 stood at Rs 2,678.3 bn as against Rs 2,307.8 bn during FY22, thereby witnessing a rise of 16.1%.

BANK OF MAHARASHTRA Balance Sheet – as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	140,619	157,902	12.3%
Advances	Rs m	1,311,704	1,712,207	30.5%
Deposits	Rs m	2,022,753	2,340,641	15.7%
Yield on advances	%	6.3	6.7
Cost of Deposits	%	3.2	3.1
Investments	Rs m	687,616	690,420	0.4%
Borrowings	Rs m	77,467	107,657	39.0%
Total Assets	Rs m	2,307,835	2,678,272	16.1%

Current Valuations for BANK OF MAHARASHTRA

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 3.9, an improvement from the EPS of Rs 1.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 31.2, stands at 6.6 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.3 times, while the price to income ratio stands at 1.1 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Income per share (Unadj.)	Rs	19.3	23.6
Earnings per share (Unadj.)	Rs	1.7	3.9
Diluted earnings per share	Rs	1.7	3.9
Avg P/E ratio	Rs	13.9	6.6
Avg P/ABV ratio	Rs	0.8	1.3
Avg Market Cap	Rs	160,859	172,469
Dividends per share (Unadj.)	Rs	0.50	1.30

Ratio Analysis for BANK OF MAHARASHTRA

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio improved and stood at 73.2x during FY23, from 64.8x during FY22. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio increased and stood at 15.51x during FY23, from 14.94x during FY22. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): BANK OF MAHARASHTRA's capital adequacy ratio (CAR) was at 0.0% as on 31 March 2023 as compared to 16.5% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank improved and stood at 16.5% during FY23, from 8.2% during FY22. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank improved and stood at 0.97% during FY23, from 0.50% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 18.26% during FY23, from 12.89% during FY22. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. BANK OF MAHARASHTRA's gross NPA ratio stood at 0.0% as of 31 March 2023 compared to 3.9% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of BANK OF MAHARASHTRA was 0.0% in financial year 2023. This compared with 1.0% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Credit/Deposit Ratio	x	64.8	73.2
Debt to Equity Ratio	x	14.9	15.5
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	16.5	0.0
Return on Equity	%	8.2	16.5
Return on Assets	%	0.5	1.0
Return on Capital Employed	%	12.9	18.3
% of Gross NPAs	%	3.9	0.0
% of Net NPAs	%	1.0	0.0
Yield on Advances	x	6.3	6.7
Yield on Investments	x	7.1	6.3

To see how BANK OF MAHARASHTRA has performed over the last 5 years, please visit here.

BANK OF MAHARASHTRA Share Price Performance

Over the last one year, BANK OF MAHARASHTRA share price has moved up from Rs 16.1 to Rs 31.2, registering a gain of Rs 15.1 or around 94.2%.

Meanwhile, the S&P BSE BANKEX is trading at 49,922.3 (up 0.6%). Over the last one year it has moved up from 39,631.1 to 49,922.3, registering a gain of 10,291.2 points (up 26.0%).

Overall, the S&P BSE SENSEX is up 13.9% over the year.

(To know more, you can check out historical annual results for BANK OF MAHARASHTRA here and quarterly results for BANK OF MAHARASHTRA here)