Syndicate Bank Q1 net up 2.7% to Rs 452 crore

Manipal-headquartered public sector lender Syndicate Bank today said its net profit grew marginally by 2.73% to Rs 452 crore for the first quarter ended June 30, 2013 compared to Rs 440 crore in the corresponding quarter last year.

“The rise in net profit was almost flat as yield on advances came down this quarter. Also, we have seen fresh slippages to the tune of Rs 1,300 crore, mostly in below Rs 10 lakh accounts,” Sudhir Kumar Jain, chairman and managing director said.

The total income of the bank has marginally increased by 5.5% to Rs 4,726 crore as against Rs 4,478 crore in the year ago quarter. The operating profit, however, increased 13% to Rs 949 crore in the quarter ended June 2013 as against Rs 841 crore in the year ago period.

Syndicate Bank has witnessed its yield on advances coming down to 9.71% from 1073% a year ago. The net interest income declined 1.44% to Rs 1,319 crore during the quarter from Rs 1,338 crore in the year ago period. The net interest margin stood at 2.83%.

“During the first quarter, there was not much increase in lending to large corporates. We have seen demand for credit only from the retail and mid-corporate accounts,” Jain said.

The Bank has made a provision of Rs 170 crore towards the bad loans, while its overall provisioning was Rs 489 crore. The Bank has managed to reduce high cost bulk deposits by Rs 6,627 crore to the level of Rs 25,650 crore. The bulk deposits form 14.05% of domestic deposits.

The return on assets (annualised) during the June quarter declined to 0.89% from 0.99% in June 2012. The percentage of net non-performing assets has gone up to 1.19% from 0.93%. The capital adequacy ratio under Basel-III stood at 11.49%.

“We have requested the government to infuse fresh capital of Rs 1,830 crore during the current year,” Jain added.