Syndicate Bank Q2 net slumps 33% on higher provisioning

Manipal-based public sector Syndicate Bank on Friday reported 33 per cent slump in net profit  at Rs 315.60 crore for the second quarter ended September 30, 2014, due to higher provisioning towards bad loans and higher tax expenses.

The bank had reported net profit of Rs 470.12 crore in the corresponding quarter last year. The bank’s tax expenses grew 100 times to Rs 100.48 crore as against Rs 1.08 crore in the year-ago period.

Net interest income, the difference between interest earned and interest expended, increased marginally to Rs 1,422.5 crore in the quarter ended September 2014 compared to Rs 1,411 crore in the year-ago period. Net interest margin came down to 2.57 per cent from 2.90 per cent in the corresponding quarter.

Provisioning towards bad loans or non-performing assets (NPAs) increased to Rs 537.79 crore during second quarter of 2014-15, while a year ago, it stood at Rs 339.96 crore. The bank’s total income increased from Rs 4,850.35 crore during the quarter ended September 2013 to Rs 5,680.96 crore during the quarter under review. Gross NPAs were at 3.43 per cent of total advances as of September 2014, up from 2.88 per cent a year ago.

Net NPAs stood at 2.2 per cent during the September 2014 quarter from 1.66 per cent earlier. Global advances increased by 13.61 per cent to Rs 1,76, 475 crore during second quarter, while a year ago, it stood at Rs 1,55,336 crore. Capital adequacy ratio as per Basel III norms stood at 10.42 per cent.

“Syndicate Bank has sought approval from the government for capital infusion of Rs 1,100 crore via a qualified institutional placement,” Executive Director M Anjaneya Prasad said.
“Bank has obtained board approval for raising additional Tier-I bonds of Rs 1,000 crore and Tier-II bonds of Rs 1,150 crore. Bank would go to market to raise Tier-II bonds shortly, Prasad said.

The bank has opened 90 branches in the July-September quarter, taking the number of such facilities to 3,451.

The bank has recruited 1,905 probationary officers and 1,525 clerks during the current year. In order to meet global standards the bank is recruiting specialists in various fields suchs as treasury management, credit and risk management, IT related services and HR management.