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Syndicate Bank plans second public issue — Net profit rises 26 per cent

Our Bureau

Bangalore , May 6

THE public sector Syndicate Bank proposed to come with its second public issue of Rs 50 crore within the next six months.

Briefing reporters here today, after the annual general meeting, the bank's Chairman and Managing Director, Mr Michael Bastian, said that the pricing of the issue had not yet been decided.

The issue would bring down the Government's stake in the bank to about 66.5 per cent from the current 73.5 per cent.

The issue would be for meeting the proposed expansion in risk weighted assets during the year 2004-05. The bank has targeted a business, of Rs 85,000 crore for the year comprising of Rs 30,000 crore as advances.

The bank would also be paying out a dividend of 10 per cent based on the good results he said. This would mean that the total dividend by the bank for the year 2003-04 was 20 per cent, inclusive of the interim dividend paid out in October 2003.

The bank, during the last financial year recorded a net profit of Rs 434 crore, up 26 per cent from Rs 344 crore in 2002-03. However, the operating profits of the bank went up by 70 per cent from Rs 619 crore in 2002-03 to Rs 1,054 crore in 2003-04.

The bank made provisions equivalent to Rs 301 crore during the year, after shifting to the 90-day income recognition norm. In addition the bank also incurred a tax liability equivalent to Rs 270 crore for the year.

The increase in profits was driven by higher income in 2003-04. Gross income went up to Rs 3,861.25 crore up from Rs 3,370 crore in 2002-03. The increase was propelled by interest income, which went up from Rs 2,875.17 crore to Rs 3,088.85 crore in 2003-04.

Further the bank also showed an increase in other income. Other income, which includes profits from treasury operations, was Rs 776.4 crore in 2003-04 up from the previous year's Rs 495 crore.

The bank has also been able to contain gross expenditure in 2003-04 to Rs 2,807 crore, as against Rs 2751.46 crore for the previous year. This was achieved despite an increase in deposits by 35 per cent during the period. This was partly due to the fact that the interest rates during the period for deposits have dropped sharply.

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