Syndicate Bank reported a 38 per cent drop in net profits at ₹302 crore for the June quarter, over the corresponding previous period’s ₹485 crore, on a sharp increase in tax expenses.

Net interest income, the difference between interest earned and expended, for the Manipal-headquartered bank grew 5 per cent to ₹1,412 crore during the quarter (₹1,351 crore).

Total income for the June quarter increased to ₹6,323 crore (₹5,523 crore). Operating profit grew a mere 3 per cent to ₹1,040 crore from ₹1,014 crore. Net interest margins stood at 2.21 per cent (2.47 per cent). Tax expenses registered a four-fold increase to ₹256.75 crore (₹60.64 crore). The bank’s asset quality weakened during the quarter, with the gross non-performing assets (NPAs) ratio increasing to 3.72 per cent from 2.97 per cent in the previous similar quarter. In absolute terms, gross NPAs rose to ₹7,545.64 crore (₹5,243).

The net NPA ratio also rose to 2.36 per cent (1.88 per cent). Net NPAs in absolute terms increased to ₹4,721 crore (₹3271 crore). The provision coverage ratio stood at 63.24 per cent (67.56 per cent).

Lending to the priority sector rose 14 per cent.

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