State-owned Bank of Maharashtra (BOM) said the pandemic-driven slowdown in the economic activities may lead to a rise in customer defaults, and its impact on the bank will depend on the COVID-19 situation going forward.
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New Delhi:
There has been a significant volatility in the global and Indian economy as the outbreak of the pandemic continues to spread, Bank of Maharashtra said in its annual report 2020-21.
The Pune-headquartered lender said the impact of the pandemic on its results will depend upon the developments on the coronavirus front going forward, including any stimulus or regulatory packages to mitigate its impact.
"While there has been an improvement in the economic activity since the easing of the lockdown measures, the slowdown may lead to a rise in the number of customer defaults and resultant increase in provisioning," said the bank's annual report 2020-21.
Its gross non-performing assets (NPAs) improved to 7.23 per cent at the end of March 2021, from 12.81 per cent a year ago. The net NPAs or bad loans were trimmed to 2.48 per cent, from 4.77 per cent by March 2020.
The lender said it has held Rs 753.49 crore COVID-19-related provisions as of March 31, 2021. It was Rs 75 crore by the end of March 2020.
In the financial year 2020-21, the bank reported a net profit of Rs 550.25 crore, up by nearly 42 per cent from the previous year's Rs 388.58 crore.
The bank's total business increased about 15 per cent to Rs 2.82 lakh crore. Total deposits moved up by 16 per cent to Rs 1.74 lakh crore as of March 31, 2021.
Gross advances grew 13.45 per cent to Rs 1.07 lakh crore.
Its Managing Director and CEO A S Rajeev said approvals and launch of multiple vaccines globally have raised hopes for less impact of the pandemic.
"With respect to Indian economy, the larger-than-expected magnitude of COVID-19 second wave has posed serious threat to the faster recovery of economic activities.
"As of now, the outlook is hazy and will largely depend on how the second wave pans out," Rajeev said.
With the COVID-19 second wave starting to wane and availability of sufficient numbers of vaccines from September 2021, growth in second half of 2021-22 is likely to pick up, he said.
The lender said its performance was outstanding in the year gone by despite all odds.
Bank of Maharashtra said the stimulus measures and reforms undertaken by the government and liquidity measures by the RBI are expected to support industrial activity and demand.
"Our bank will continue to improve its business position while navigating these uncertain times," Rajeev said in his statement to the shareholders of the bank.
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