Syndicate Bank Q3 net up 50%

Syndicate Bank reported a 50.38% jump in net profit to Rs 508.49 crore for the quarter ended December 2012 as compared with Rs 338.12 crore in the corresponding quarter previous year, helped by improved asset performance as well as reduction in tax expenses by Rs 174.25 crore.

Total income for the quarter under review, however, grew Rs 6.54 crore to Rs 4,489.9 crore from Rs 4,214.35 crore in the year ago period. Sequentially, this was down 1.24% as compared with Rs 4,546.33 in the quarter ended September, 2012. The bank crossed the milestone of Rs 3-lakh crore business in this quarter.

 

Syndicate Bank chairman and managing director MG Sanghvi said a host of steps, including reduction in cost of deposits, improved yields on assets, reduction and recovery in non performing assets (NPAs) besides growth in advances, helped achieve higher profits.

The bank was able to reduce the dependence on high-cost deposits from a peak of 23% to 16% of the total deposits by ceding about Rs 7,000 crore deposits carrying high interest, he said. It registered a growth of 17% in advances and 15% in deposits during the quarter, according to him.

The recovery in NPAs in the three-month period rose to Rs 838 crore from Rs 534 crore at the end of the September quarter while upgradation of assets into standard ones went up to Rs 844 crore from Rs 613 crore at the beginning of the quarter.

However, net interest margin (NIM) marginally came down to 3.28% from 3.33% in the previous quarter while the cost of deposits still remained on the higher side at 6.92 for the December quarter as compared to 6.74% in early 2012.
 
To raise Rs 1,400 cr through QIP or rights issue

As the request for Rs 1,400 crore not figuring in the capital infusion plan approved by the Government of India, the bank board has decided to pursue alternative routes to raise the capital. Singhvi said the board had approved to tap the funds through the qualified institutional placement (QIP) or rights issue. "We would like to raise this Tier I equity capital by March 2013. This is necessary to support our growing business," he said.

Besides, the bank plans to raise $500 million overseas debt as a medium-term loan through its London branch for Tier II capital requirement in the near future in addition to the similar amount raised during the December quarter, according to Singhvi.