Growth in income buoys Syndicate Bank net 17%

BS 200 SCORECARD

Syndicate Bank has reported improved performance in the second quarter (ended September 30) of the current financial year with net profit going up 17 per cent to Rs 205 crore over the comparable figure of the corresponding quarter of 2005-06. This was on the back of total income rising faster, by 43 per cent, to Rs 1,603 crore.

In the first half year of 2006-07, net profit rose 14 per cent despite increase of Rs 50 crore in provisions, and total income too shot up 34 per cent compared with the corresponding period of 2005-06.

The earning per share (annualised) on September 30, 2006 stood at Rs 14.78 against Rs 13.80 on September 30, 2005.

The bank's return on assets declined from 1.31 per cent on September 30 last year to 1.05 per cent on September 30 this year.

This happened despite a rise in net profit as advances, which mostly make up assets, rose 48 per cent over last year, thus putting margins under pressure, said George Joseph, executive director, Syndicate Bank.

The bank's bottomline was boosted by a decline in its employee cost from Rs 299.15 crore in the September quarter last year to Rs 221.94 crore during the September 2006 quarter, mainly owing to adjustment of expenses towards VRS.

The bank has written back Rs 43 crore of the total provisions made earlier towards VRS payment.

The NII (net interest income) for the half year of 2006-07 stood at Rs 990 crore against Rs 952 crore for the previous corresponding period. The hardening of interest rates and non-availability of interest on balance maintained with the RBI (for CRR purposes) affected growth of NII, the bank said.

The gross NPAs in percentage terms came down to 3.67 per cent on September 30, 2006 from 4.68 per cent on September 30, 2005. Net NPAs also declined to 0.89 per cent on September 30 this year from 1.44 per cent on September 30 last year.

The bank's CAR (capital adequacy ratio) stood at 11.74 per cent on September 30, 2006 versus 13.40 per cent on September 30, 2005 and 11.73 per cent on March 31, 2006. The CD ratio was 65 per cent against 66 per cent reported on September 30, 2005. This is essentially on account of high growth of deposits along with high growth in advances.