Syndicate Bank's Q3 net down 20%

Syndicate Bank on Wednesday reported a 20 per cent decline in net profit to Rs 305 crore for the December quarter, due to margin compression and increase in tax expenses. The net interest margin declined to 2.25 per cent during the period as compared to 2.76 per cent during the same period of the previous year and 2.57 per cent in the preceding quarter.

This is because the bank had reduced its spread over the base rate while the full impact of the reduction of deposit rate is yet to be realised.

The net interest income, the difference between the interest earned and expended, stood flat at Rs 1,317.68 crore in the December quarter. According to P K Srivastava, executive director, Syndicate Bank, the deferred tax liabilities of the bank was Rs 175 crore. In addition, provisioning for non-perfomring assets and operating expenses increased due to branch expansion.

The percentage of net non-performing assets increased to 2.38 per cent from 1.66 per cent for in the year ago quarter. The percentage of gross NPAs went up to 3.60 per cent from 2.80 per cent a year ago.

The total income of the bank went up 18.2 per cent to Rs 5,922 crore for the said period. The operating profit of the bank, meanwhile, recorded a marginal growth of 4 per cent to Rs 838 crore over the year ago.

On an year on year basis, deposits were up 29 per cent at Rs 1,95,120 crore, while advances grew 19 per cent to Rs 1,57,378 crore.

The bank has been its capital adequacy ratio declining to to 10.46 per cent from 11.26 per cent during the December quarter last year.

In order to boost its capital, the government will infuse Rs 460 crore in the bank by the end of this financial year. The bank's board on Wednesday approved the preferential allotment of shares to the government. In addition, the bank is also planning to raise capital of Rs 2,100 crore by way of bonds, by the end of March.