 "Syndicate Bank net dips 31%")
“Non-availability of MAT credit of Rs 114 crore accounted in the fourth quarter of last financial year and higher provisions towards non-performing assets (NPAs) pulled down the net profit of the bank during the quarter,” said Sudhir Kumar Jain, chairman and managing director.
The bank made a provision of Rs 331 crore towards NPAs, more than double of last year’s Rs 160 crore. The overall provisions have gone up 73 per cent to Rs 631 crore from Rs 364 crore in the year-ago quarter.
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The operating profit for the quarter increased 11 per cent to Rs 998 crore, compared with Rs 901 crore in the March quarter of the last financial year.
The net interest income of the bank increased six per cent to Rs 1,433 crore from Rs 1,354 crore in the corresponding quarter last year.
The cost of deposits was flat at 6.55 per cent as against 6.56 per cent a year ago. The yield on advances, however, came down to 9.65 per cent from 10.04 per cent due to high slippages of NPAs during the year. During the fourth quarter, the Bank witnessed fresh slippages of Rs 1,197 crore, of which Rs 400 crore would be upgraded very soon, Jain said.
The Bank’s gross non performing assets have gone up by 55 per cent to Rs 4,611 crore in the March quarter of 2014 from Rs 2,979 crore in the same quarter last year. The percentage of Net NPAs stood at 1.56 per cent from 0.76 per cent in the year ago period. The return on assets has come down to 0.70 per cent from 1.19 per cent a year ago.
The capital adequacy ratio under Basel-III stood at 11.41 per cent.
Global business of the Bank increased 16 per cent year on year to Rs 3,34,779 crore from Rs 3,88,584 crore in FY13. Deposits grew 15 per cent to Rs 2,12,343 crore, while advances increased 16 per cent to Rs 1,43,735 crore. Domestic CASA (current account savings account) deposits stood at 29.90 per cent of the total deposits. “The Bank is taking a series of measures to increase the CASA level to 31.5 per cent during the fiscal 2014-15. We will soon launch a CASA campaign to increase the level,” Jain said.
The Bank would launch a road show in the next 15 days to raise the funds through Medium Term Notes (MTN) in overseas market for fund requirements of London branch. The bank intends to raise up to $2 billion as and when the interest rates are favourable, he said.
The board the lender also approved capital raising of Rs 2650 crore of which Rs 1500 crore will be equity capital and the amount via Basel-III complaint tier-II bonds. The bank will explore options like qualified institutional placement, rights issue and follow-on public offer for raising equity.
Syndicate Bank’s shares closed at Rs 99.20 per share, a drop of 7.16 per cent over the previous close on Bombay Stock Exchange on Wednesday.