Working Note: Bank Of Maharashtra

Knowledge Snapshot

Last updated: 2026-10-28

Issuer Overview

• Bank of Maharashtra (BoM) is a listed Indian public-sector commercial bank headquartered in Pune. It is funded primarily by deposits and operates across retail, corporate / wholesale, MSME, agricultural, infrastructure and treasury banking.
• The Government of India held 73.6% of equity at 30 September 2026 (reviewed standalone results). This is relevant to expected support but is not evidence of an explicit guarantee on any particular BoM obligation.

Core Credit View

• Reported asset quality, profitability and prudential capital / liquidity metrics improved through FY2026 and H1 FY2027, supporting an improving but conditional domestic public-sector bank credit view.
• The view depends on continued asset-quality improvement, deposit-funded growth and preservation of capital headroom; it is not an individual-security recommendation.

Business and Franchise View

• BoM is a mid-sized public-sector bank with a material Maharashtra concentration. CRISIL reported Maharashtra represented 71.6% of deposits and 51.7% of advances at September 2025.
• FY2026 reported segment income was largest in retail banking, followed by corporate / wholesale banking and treasury. The available segment reporting is not a risk-adjusted profitability or capital-consumption analysis.

Capital Structure and Structural Points

• At 30 September 2026, the reviewed standalone results show CET1 of 15.61% and total capital of 18.51%; total capital declined modestly from June despite stronger profit. The presentation reports Tier 1 of 16.37%. Detailed current and prior-period metrics and source scopes are in data/bank_of_maharashtra_q2_h1_fy2027_metrics_20261028.json.
• The reviewed 7.89% Basel III Tier II Bonds (Series VIII) term sheet describes unsecured, subordinated and non-guaranteed debt ranking below depositors and general creditors but above Tier I. This must not be generalized to every outstanding BoM instrument without the relevant offering documents.

Liquidity and Funding View

• June 2026 LCR was 117.87% on a consolidated basis, with HQLA of INR80,343 crore. NSFR was 125.19%; the reviewed NSFR disclosure did not expressly state a separate accounting-consolidation perimeter.
• September 2026 deposits grew faster than gross global loans sequentially, but domestic CASA share declined and borrowings increased. GIFT IBU issued USD500 million unsecured foreign-currency bonds in Q2 maturing September 2031. Full debt terms, hedging and counterparty detail remain unconfirmed. September LCR/NSFR was not checked; the June figures above are historical.

Credit Strengths

• Reported gross / net NPA ratios were 1.25% / 0.12% at 30 September 2026, with absolute gross NPA also lower sequentially. MSME and retail ratios increased, showing that aggregate improvement is not uniform.
• Q2 FY2027 standalone profit strengthened, although COVID reserve releases supported earnings and consolidated profit was reduced by an associate loss. The bank also built an anticipated ECL provision. These effects need separate treatment when assessing recurring loss absorption.

Credit Weaknesses

• Maharashtra concentration, moderate national scale, incomplete borrower-concentration and liquidity detail, and the need to demonstrate that earnings and NPA improvement are durable remain constraints.

Rating Watchpoints

• ICRA reaffirmed [ICRA]AA+ (Stable) on infrastructure and Basel III Tier II bonds on 21 July 2026. The underlying full current rationale was not obtained.
• CRISIL's November 2025 CD rationale cited expected government support, resource profile and asset-quality / profitability improvement, offset by moderate scale and regional concentration.

Recurring Analytical Cautions

• Keep standalone accounting figures, standalone regulatory capital ratios, consolidated LCR and the separately unspecified NSFR perimeter distinct; do not make unqualified cross-scope comparisons.
• Do not treat expected government support as an explicit guarantee, or an issuer-level credit view as a security-specific view for Tier II or AT1.

Reliable Core Sources

• Bank of Maharashtra FY2025-26 annual report and statutory results; Q1 FY2026-27 results; June 2026 Basel III Pillar 3, LCR and NSFR disclosures; ICRA rating-details page; and CRISIL's November 2025 rationale.

Issuer Notes

Last updated: 2026-10-28

Ongoing Follow-Up Items

• Test recurring pre-provision income separately from calibrated COVID reserve releases; monitor the remaining reserve, anticipated ECL buffer and associated credit-cost definitions. Track associate losses separately from standalone earnings. September 2026 source detail is in data/bank_of_maharashtra_q2_h1_fy2027_metrics_20261028.json.

• Track quarterly advances, deposits, CASA, calculated loans-to-deposits, borrowing mix, HQLA composition, LCR and NSFR together; do not infer durable funding stability from a single reporting date.

• Track gross-NPA additions, reductions, recoveries, write-offs, NPA provisions, net NPA, operating profit and capital-ratio direction together to assess whether asset-quality improvement remains durable.

Unresolved Issues and Items to Check Next Time

• Confirm current CASA, NIM, detailed credit cost, provisioning coverage, portfolio and borrower concentration, RWA trend and capital plan.
• Confirm current rating rationales and all relevant individual debt terms, including maturity, calls, coupons, covenants, loss-absorption mechanics, guarantees and seniority.

Analytical Cautions

• The NPA movement bridge distinguishes gross additions, total reductions and recoveries/upgrades; do not assign residual reductions to cash recoveries or write-offs without evidence. Monitor MSME and retail migration even when agricultural improvement lowers the aggregate NPA ratio. PCR including technical write-offs differs from coverage of the remaining on-balance-sheet NPA stock.

• Separate non-tax provisions in the statutory statement from the presentation total including tax. IFR transfer to balance of profit is a reserve reclassification, not fresh equity issuance or recurring earnings.

• Separate reported NPA-ratio improvement from its possible drivers: fresh slippages, recoveries, upgrades, write-offs and loan growth. Do not attribute the trend to one mechanism without evidence.

• Distinguish the expected Government of India support factor from an explicit legal guarantee. Treat Tier II and AT1 as security-specific analyses even when the issuer-level direction is constructive.

Report Wording Cautions

• State the accounting and regulatory scope for every capital or liquidity metric. The June 2026 LCR is consolidated and the June Pillar 3 capital ratios are standalone; the Q1 results press release and the reviewed NSFR disclosure do not separately label an accounting-consolidation perimeter for all measures.
• Keep total global deposits and gross global advances distinct from net advances and the separately disclosed domestic credit-deposit ratio; do not use measures with those different definitions as a direct funding reconciliation.
• Do not make a live spread, peer-relative-value or specific-security recommendation without current market data and the applicable offering documentation.

Follow-Up on Management Strategy, Investment Plans, and Financial Policy

• Follow the expansion of overseas advances and foreign-currency funding through GIFT IBU. Verify the USD bond maturity ladder, hedging, proceeds, seniority and full terms; the Q2 filing confirms issuance but does not establish those protections. Assess deposit growth alongside declining domestic CASA share and increased borrowings.

• Monitor external capital actions, including conversion of share warrants, and assess their effect separately from recurring internal capital generation and RWA growth.

Items to Check for Ratings and Bond Investors

• The reviewed term sheet applies to the 7.89% Basel III Tier II Bonds (Series VIII) only. Verify the exact instrument documentation before drawing conclusions about ranking, calls, coupon treatment or loss absorption for any other BoM security.

Additional Discussion Verification Record

• No current additional discussion existed at the time of the 2026-09-08 issuer summary.