Bank of Maharashtra Q1 FY26: Profit ₹1,593cr, GNPA 1.74%

What Bank of Maharashtra reported for the June quarter

Bank of Maharashtra (BoM) reported a stronger set of numbers for the quarter ended June 2025, supported by higher interest income and steady asset quality. The state-run lender posted net profit of ₹1,593 crore, up 23% year-on-year from ₹1,293.68 crore. Total income rose 16% to ₹7,879.18 crore from ₹6,768.76 crore a year earlier.

The quarter’s performance also reflected traction in core income. Net interest income (NII) increased 17.6% year-on-year to ₹3,292 crore, as per the numbers cited in the report. Interest income rose to ₹7,054 crore from ₹5,875 crore in the year-ago period.

Profitability trends: profit, operating profit, ROA and ROE

Operating profit rose 12% year-on-year to ₹2,570 crore, pointing to healthy operating performance alongside credit growth. BoM’s profitability metrics were also discussed in the context of full-year performance and quarterly momentum.

For Q1 FY26, return on assets (ROA) improved to 1.80% from 1.72% in the corresponding quarter of the previous fiscal year. Return on equity (ROE), however, declined to 23% from 27.62% over the same period, indicating that while earnings rose, the equity base and other drivers affected ROE.

Separately, commentary in the provided material also noted ROA improving to 1.86% for the full year and touching 1.97% in Q4, highlighting a broader trend of improving profitability over recent quarters.

Core income: NII growth and net interest margins

NII growth remained one of the main drivers in the quarter, rising 17.6% to ₹3,292 crore (also referenced as “nearly ₹3,300 crore” in the material). Net interest margins (NIM) were 3.95% for the June quarter. This was largely unchanged from 3.97% in the same quarter last year and 4.01% in the March quarter.

The material also pointed to funding-side dynamics. While the cost of deposits declined, the overall cost of funds fell only 4 basis points, partly due to higher borrowing levels. These details matter because they help explain why margins were stable rather than expanding sharply.

Asset quality: GNPA, NNPA and provision coverage

BoM’s asset quality metrics stayed firm in Q1 FY26, with improvement visible on a year-on-year basis. Gross non-performing assets (GNPA) declined to 1.74% from 1.85% a year ago. Net non-performing assets (NNPA) reduced to 0.18% from 0.20%.

On a sequential basis, the report noted asset quality was stable, with GNPA unchanged at 1.74% and NNPA also holding steady at 0.18% compared with the March quarter.

The bank’s provision coverage ratio was cited at 98.36%, indicating a high buffer against potential losses on stressed assets.

Provisions and slippages: mixed signals in the quarter

Provisions declined to ₹867.41 crore from ₹983.29 crore in the preceding quarter, as per the provided information. But slippages increased sequentially to ₹727 crore from ₹660 crore.

Another data point in the material compared slippages to ₹592 crore over the same period, while also attributing the higher slippages to stress in agricultural loans. Taken together, the quarter showed continued strength in reported NPA ratios, but also signs of fresh stress formation that warrants monitoring.

SMA-2 spike and sectoral stress: agriculture and MSME cues

A notable operational risk signal in the material was the sharp rise in SMA-2 (special mention accounts) to ₹171 crore from ₹40 crore in the preceding quarter. The commentary described this as suggesting potential strain in the loan portfolio, with the rise partly due to accounts transitioning between SMA buckets.

The material also said the bank saw higher slippages, especially in the agriculture segment, which accounted for 47% of slippages in Q1 FY26. In addition, the MSME and agriculture loan portfolios were described as declining sequentially, with MSME down 7% quarter-on-quarter and agriculture down 8%.

Capital and efficiency: CAR and cost-to-income

On the balance-sheet strength side, BoM reported a higher capital adequacy ratio of 20.06%, up from 17.04% in the corresponding quarter of FY25. This level of capital supports growth and provides resilience against credit shocks.

Efficiency metrics were also discussed. The cost-to-income ratio improved to 37.57%, according to the material, indicating a modest improvement in operating efficiency.

Growth metrics and business momentum

The provided content included multiple growth indicators. Total business (deposits plus advances) was cited at about ₹546,000 crore (₹5.46 lakh crore), growing by over 14%.

Separately, the material referenced “robust credit growth of 15.36%” to ₹241,000 crore (₹2.41 lakh crore) in the first quarter. Another commentary line also cited total business growth of 17.5%, with advances rising 21.7% and deposits growing 14.1%. These figures reflect strong momentum, even as the bank monitors agricultural and SMA signals.

Key numbers at a glance

Why the quarter matters for investors

The Q1 FY26 numbers underline a combination of earnings growth, stable margins, and strong headline asset quality. The improvement in GNPA and NNPA on a year-on-year basis, along with a high provision coverage ratio of 98.36%, strengthens the case that the bank has maintained tighter credit standards.

At the same time, the sequential increase in slippages and the sharp rise in SMA-2 to ₹171 crore from ₹40 crore are the operational metrics that investors and analysts typically track closely for early signs of stress. The material also pointed to agriculture as the main driver of slippages, with management commentary describing it as cyclical and linked to the sector’s nature, while expressing optimism that favourable monsoon conditions could help reduce risks.

Conclusion

Bank of Maharashtra’s Q1 FY26 performance showed higher profit, stronger core income, and improved year-on-year asset quality, supported by a stronger capital position. The key monitorables from the quarter are the rise in slippages, agriculture-linked stress signals, and the spike in SMA-2, even as reported NPA ratios remained stable sequentially. Investors will watch subsequent quarters for whether slippages normalise and whether the bank sustains NII growth and margins amid changing funding costs.