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Syndicate Bank reported a 20 per cent drop in net profit for the December quarter on lower net interest income and higher tax expenses.
The Manipal-headquartered public sector bank reported a net profit of ₹305 crore for the December quarter as against ₹379.76 crore in the corresponding year-ago quarter. Operating profit was 4 per cent higher at ₹838 crore (₹806 crore).
Net interest income, the difference between the interest earned and expended, stood at ₹1,317.68 crore (₹1,358.53 crore in the year-ago quarter).
Capital infusion The Syndicate Bank board decided on Wednesday to issue equity shares of ₹10 each aggregating to ₹460 crore to the government on preferential basis. As a result, the government’s stake in the bank is expected to go up by 1.4 per cent from the current 67.39 per cent. Following the announcement, the Syndicate Bank scrip ended 10 per cent higher at ₹115 on the BSE.
Deposits during the quarter grew 29 per cent to ₹2,51,469 crore, while advances rose 19 per cent to ₹1,86,630 crore. The gross NPA (non-performing asset) ratio stood at 3.60 per cent against the corresponding last year’s 2.80 per cent. The net NPA ratio grew to 2.38 per cent during the quarter, up from 1.68 per cent. The net interest margin stood at 2.76 per cent against the corresponding last quarter’s 2.76 per cent.
Provisions other than tax stood at ₹290.41 crore (₹458.93 crore). The tax expense was higher at ₹242.80 crore on deferred tax liability (DTL) as against a write-back of ₹33 crore in the corresponding period last year.
TK Srivastava, Executive Director, Syndicate Bank, said fresh slippages during the quarter stood at ₹1,300 crore, lower than the ₹1,600 crore in the corresponding previous-year quarter.
Bond issue He said the bank expects to raise about ₹1,000 crore Tier I capital through issue of bonds over the next few months. The bank also expects to raise ₹2,100 crore through a qualified institutional placement in the next financial year.
Srivastava said credit offtake from the industry remains muted.
To hire more The bank, he said, will hire about 5,000 people in 2015-16 to meet its growth plans. This will include 2,900 officers and 2,100 clerical staff. As of end-December 2014, the bank had about 29,000 employees managing a total of 3,463 branches. About 800 employees are expected to retire by end-March.
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