Margin compression from rising deposit costs
Cost of deposits increased 5bps QoQ to 4.38%, and management noted a structural shift of savings to other asset classes, potentially pressuring NIM.
MAHABANK / bear-case history
Track the concerns that keep returning.
Bank of Maharashtra · risk themes across the available quarters.
Research layer active
Bear-case history
Risks carried through the record.
medium
Maharashtra debt waiver scheme impact
The scheme could result in a one-time haircut of ₹450-500 crore for the bank, though management stated it is largely provisioned for.
SMA 2 spike due to government account
SMA 2 increased from ₹56 crore to ₹208 crore QoQ, largely due to one government entity account of ₹87 crore, which management expects to regularize.
Yield on advances decline
Yield on advances fell 71bps YoY to 8.57% due to MCLR resets and rate cuts, though management expects stabilization with potential rate hikes.
Agriculture NPA elevation
Agriculture GNPA has risen to nearly 10% due to rebalancing and RBI classification changes; management expects normalization in 1-2 quarters.
ECL provisioning impact
ECL provisions of ₹2,500 crore need to be built by FY31, requiring ₹100-125 crore per quarter, which could pressure profitability.
Cost of deposit pressure
Cost of deposits increased 8 bps due to fixed deposit repricing and client shift from CASA to term deposits, potentially impacting NIM.
Capital consumption and fund raise dilution
Capital adequacy consumed 193 bps in Q2; planned ₹5,000 crore equity raise may dilute existing shareholders.
Margin compression from rate cuts
RBI rate cuts of 125bps have pressured yields; full impact of Q3 cut will be felt in Q4, and further cuts could compress NIM.
Deposit growth lagging credit growth
9-month deposit growth of 4.73% trails credit growth, pushing CD ratio to 85%; reliance on Q4 seasonal inflows to meet 14% target.
Treasury loss from Gramin Bank amalgamation
One-time hit of ₹290 crore from amalgamation of Maharashtra Gramin Bank and Vidharbha Konkan Gramin Bank impacted treasury profits.
MSME rebalancing execution risk
Strategic shift away from bill discounting and tightening underwriting (CMR 1-5 only) may slow MSME growth; current YoY growth is 8% vs earlier double-digit.