Syndicate Bank net profit up 2% to Rs 417 cr in Q4

Higher provisions and flat net interest income resulted in slower growth of net profit

Manipal-based public sector lender Syndicate Bank on Saturday announced a marginal increase of 2 per cent in net profit at Rs 417 crore for the fourth quarter ended March, compared to Rs 409 crore in the corresponding quarter last year. Total income grew 23.2 per cent to Rs 6,599 crore from Rs 5,357 crore in the year ago period.

"Our net profit did not grow much mainly because of the higher provisions and contingencies as well as an almost flat net interest income during the quarter," said T K Srivastava, executive director of Syndicate Bank.

The bank’s net interest income declined about 1 per cent to Rs 1,423 crore from Rs 1,433 crore in the year ago quarter. The net interest margin has declined to 2.29 per cent in March quarter from 2.79 per cent in the year ago quarter.

The operating profit of the bank recorded a growth of 20 per cent to Rs 1,201 crore as against Rs 998 crore in the fourth quarter of last year.

The bank witnessed 17 per cent growth in global advances to Rs 2,05,804 crore compared to Rs 1,76,241 crore in the fourth quarter last year. Total deposits increased 20 per cent to Rs 2,55,388 crore as against Rs 2,12,343 crore. Domestic CASA deposits grew 14 per cent year on year to Rs 63,671 crore during the March quarter.

The bank's provisions went up 13.3 per cent to Rs 715 crore during the March quarter compared to Rs 631 crore a year ago. Cost of deposits increased 18 basis points to 6.73 per cent against 6.55 per cent in March 2014, while the yield on advances declined 42 basis points to 9.23 per cent from 9.65 per cent a year ago.

The percentage of gross and net non-performing assets ratios stood at 3.13 per cent and 1.90 per cent during the March 2015 quarter from 2.62 per cent and 1.56 per cent respectively in the year ago quarter. The Bank witnessed a fresh slippage of Rs 820 crore, while the recoveries were at Rs 767 crore.

"During the fourth quarter, we have seen higher NPAs in the industrial sector and agriculture sector. For the full year, the industrial sector has seen a slippage of Rs 2,500 crore, while agriculture sector contributed Rs 842 crore towards NPAs mainly due to the subdued economy during the year," Srivastava said.

The capital adequacy ratio under Basel-III stood at 10.54 per cent as against 11.41 per cent in March 2014. The return on assets on annualized basis has slipped to 0.58 per cent from 0.70 per cent.

The Board of directors has recommended a final dividend of 47 per cent for 2014-15.