Net profit rose mainly on account of the increase in other income, which went up by 24.8 per cent to Rs 241 crore during the quarter. Other income constitutes commission on foreign exchange, brokerage charges, fee-based income and profit from sale of investments.
The bank's total income during the period rose by 23 per cent to Rs 2,376 crore y-o-y. The net interest income during the quarter was Rs 562 crore, a drop of 6.7 per cent over the same period last year.
The bank was able to save 2 per cent on repricing bulk deposits during the quarter. The return on assets dropped marginally to 0.88 per cent compared with 0.91 per cent, while the capital adequacy ratio declined to 11.22 per cent from 11.74 per cent. The bank has complied with Basel-II norms as on March 31, 2008.
The earnings per share during the quarter improved to Rs 16.25 from Rs 13.72 from last year.
For the full year ended March 31, 2008, Syndicate Bank reported a growth of 18.43 per cent in its net profit to Rs 848 crore compared with the previous financial year. The bank's total income for the fiscal increased by 32 per cent to Rs 8,796 crore. Interest income for the year stood at Rs 7,906 crore, a growth of 31 per cent.
Announcing the annual results at a press conference here today, Syndicate Bank Executive Director George Joseph said the bank is waiting for the Centre's approval for its QIP programme. "Our proposal for a follow-on public offer was not completely rejected by the government. We have many options to raise funds, including QIP and FPO. We prefer to go for a QIP issue and our proposal is under the consideration of the government. Currently, we have sufficient capital to take care of our requirements till September and we hope to get approval for QIP issue during the first quarter."
Currently, the government is holding 67 per cent stake in Syndicate Bank. The bank is planning to issue 8 crore shares.
The bank could have reported higher profits but for the drop in net interest margin, which stood at 2.57 per cent during the year compared to 2.72 per cent reported in the previous financial year. The banks's cost of deposits went up to 6.91 per cent compared with 5.44 per cent in 2006-07. The profit from sale of gold coins was Rs 3 crore. The bank had launched gold coin sales in July 2007.
He said the bank is also planning to raise capital through a medium term notes (MTN) programme. "We are closely monitoring the global markets, which are not encouraging currently. The legal due diligence is done. While we have set up a $500 million MTN programme, we are eligible to raise up to $155 million under tier-I and tier-II combination and we will stick to that," Joseph added.
