Syndicate Bank reports Rs 251 cr net profit in Q2

State-owned Syndicate Bank on Thursday reported a net profit of Rs 251.05 crore for the second quarter this fiscal as provisioning requirements came down due to reduced bad loans.

The bank had reported a net loss of Rs 1,542.54 crore in the same period previous fiscal. Sequentially, the bank had registered a net loss of Rs 980.46 crore.

Total income in the July-September quarter of 2019-20 increased to Rs 6,153.10 crore as against Rs 5,888.87 crore in year-ago period, the bank said in a regulatory filing.

The bank's provisioning for bad loans and contingencies came down to 683.94 crore during the quarter, as against Rs 2,217.26 crore parked aside in the same period a year ago.

Though the bad loan proportion remained at elevated level, it was cut to 11.45 per cent of the gross loans as on September 30, 2019, as against 12.98 per cent at the end of September last year. In absolute terms, it stood at Rs 25,382.26 crore, down from Rs 27,131.14 crore in the year-ago quarter.

Likewise, net non-performing assets (NPAs) or bad loans also came down to 5.98 per cent (Rs 12,481.35 crore) from 6.38 per cent (Rs 13,321.30 crore).

The return on assets also improved to 0.33 per cent from (-) 2.03 per cent a year ago, and (-) 1.30 per cent in the preceding quarter ended June.

Syndicate Bank said it has restructured 5,502 standard MSME accounts up to September 30, 2019 as per the RBI circular of January this year amounting to Rs 195.06 crore. The bank has maintained a provision of 5.25 per cent on these accounts.

The board of directors in its meeting held on September 13, 2019 has considered and accorded its in-principle approval for amalgamation of Syndicate bank into Canara Bank, subject to all applicable approvals, it said.

The provision coverage ratio as on September 30, 2019 stood at 68.64 per cent.

"On September 20, 2019 vide taxation laws (amendment) ordinance 2019, the government of India inserted section 115BAA in the Income Tax Act 1961, which provides domestic companies a non reversible option to pay corporate tax at a reduced rates effective April 1, 2019 subject to certain conditions. The bank is currently in the process of evaluating this option," the lender said.

Stock of the bank traded 9.54 per cent higher at Rs 31 on BSE.