Syndicate Bank Q3 net dips 61% to Rs 119.7 crore

Syndicate Bank Q3 net dips 61% to Rs 119.7 crore

Syndicate Bank Q3 net dips 61% to Rs 119.7 crore

Syndicate Bank on Thursday reported 60.76 per cent net loss at Rs 119.67 crore for the third quarter ended December 31, on account of additional provisioning of Rs 440.29 crore.

The bank had reported a net profit of Rs 304.99 crore in the corresponding quarter last year.  However, the bank’s total income went up 4.50 per cent to Rs 6,188.25 crore, compared with Rs 5,921.58 crore a year ago, Syndicate Bank said in a filing to the BSE.

Syndicate Bank Managing Director and CEO Arun Shrivastava said, “The Reserve Bank of India’s target of cleaning up the balance sheet of banks by March 2017, will force the banks to take a hit on their profits. However, I foresee some positive development inherent in this, as asset quality of PSBs has assumed to improve in the near future.”
Syndicate Bank parked a substantial amount towards deferred tax liability and provisions that led to the loss on its books.

For the third quarter of the current fiscal, the bank made provisioning and contingencies to the tune of Rs 875.23 crore, as against Rs 290.41 crore in the corresponding period of previous fiscal, 2014-15.

The bank’s gross non-performing assets (NPAs) or bad loans rose to 4.61 per cent of the gross advances as of December 2015, from 3.6 per cent in the year-ago period.

Net NPAs were at 3.04 per cent of the net advances for the quarter under review, up from 2.38 per cent a year ago.

The Syndicate Bank stock closed 5.13 per cent down at Rs 70.25 on the BSE.

“Under the Indradhanush programme, the government has committed  to capitalise Rs 70,000 crore over four years, up to FY-2018-19, which will give some relief to public sector banks on the capital front,” Shrivastava said.

“As advised by RBI, the bank has decided to recognise deferred tax liability (DTL) in respect of difference in valuation of held-to-maturity (HTM) securities between accounting income and taxable income. The bank has estimated and provided an amount of Rs 423.18 crore towards the same during the nine months ended December 2015. Similarly, following the opinion of the expert advisory committee of ICAI, the bank has recognised deferred tax asset (DTA) on the difference in the provision for NPA... and the DTA of Rs 258.87 crore has been recognised as on December 2015”, the bank said.