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Our Bureau

Bangalore, July 30 Syndicate Bank has reported a net profit of Rs 221.03 crore for the first quarter (Q1) of the financial year 2007-08 (FY08), a 22 per cent increase from Rs 180.58 crore in Q1 of FY07.

Briefing reporters, the Chairman and Managing Director, Mr C.P. Swarankar, said: “We have improved our interest earnings and reduced accretions to non performing assets. This contributed to our improved earnings.”

Interest on advances increased to Rs 1,335.38 crore, up 58.4 per cent over the corresponding period of the last financial year. The improved interest income was contributed by a 25.5 per cent increase in advances to Rs 51,844 crore.

Besides, the bank also resorted to some repricing of assets. As a result, its average yield on advances improved to 10.21 per cent from about 9.5 per cent. Moreover, the bank was also able to improve its treasury earnings that helped pull up its other income. During the period, the bank’s gross expenditure rose to Rs 1,684.82 crore from Rs 1,063.10 crore. This was largely on account of large accretion to its deposits.

Deposits grew 26.4 per cent to Rs 80,682 crore. But the cost of servicing the deposits also rose during the period.

Interest expenditure was Rs 1,299.29 crore up from Rs 724.94 crore. The cost of working funds translated into 6.42 per cent up from 4.84 per cent. Yet, Syndicate Bank was able to improve its net interest margin to 2.75 per cent up from 2.55 per cent.

But Mr Swarankar said that this year, the bank intended to raise its low-cost deposits or CASA that currently comprised 32 per cent of its deposits to about 36 per cent. This was to bring down the cost of working funds.

Referring to capital requirements, the CMD said that the bank had an enabling provision to raise more capital to support its business growth both Tier-I and Tier-II.

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Syndicate Bank Q1 net up 11 pc

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