The Hindu : Business : Syndicate Bank net profit at Rs. 536 crore

Online edition of India's National Newspaper
Tuesday, May 16, 2006

Business

Business

Syndicate Bank net profit at Rs. 536 crore

Special Correspondent

Proposes 10 p.c. final dividend, taking the total to 25 p.c. for 2005-06

BANGALORE: The net profit of Syndicate Bank rose by 33 per cent during 2005-06 to Rs. 536 crore from Rs. 403 crore a year ago. However, the net profit for the fourth quarter of the fiscal was Rs. 10 crore against Rs. 280 crore during the corresponding period in the previous year, mainly due to higher NPA provisioning of Rs. 142 crore, dip in operating profit by Rs. 65 crore and standard asset provisioning of Rs. 40 crore, the Chairman and Managing Director, C. P. Swarnkar, told reporters here on Monday.

The operating profit improved by two per cent during the year to Rs. 1,038 crore from Rs. 1,020 crore a year ago despite a reduction in profit on sale of investments by Rs. 113 crore. The operating profit slid Rs. 65 crore during the fourth quarter to Rs. 240 crore largely due to rise in operating expenses by Rs. 39 crore for core banking solution (CBS) conversion and hardening of interest rates.

The bank has proposed a final dividend of 10 per cent, taking the overall dividend for the year to 25 per cent, including the 15 per cent interim dividend declared earlier.

The total business of the bank grew by 23.31 per cent to Rs. 91,284 crore from Rs. 74,031 crore. Out of this, deposits grew by 16 per cent to Rs. 53,624 crore while advances jumped 36 per cent to Rs. 37,660 crore.

The CMD said the bank had cut the net NPA level during the year to below one per cent at 0.86 per cent while the gross NPA came down to four per cent from 5.17 per cent a year earlier.

The bank has hiked the benchmark prime lending rate (PLR) by 25 basis points to 11.25 per cent with effect from May 16.

Consequently, it has hiked the interest rates applicable to fixed and floating rate housing loans.

Hikes PLR

Accordingly, the interest rates for loans (floating) up to six years have been hiked from 7.25 per cent to 7.50 per cent, over six years and up to 12 years to 8 per cent, over 12 years and up to 18 years to 8.25 per cent and over 18 years and up to 25 years to 8.50 per cent. In the case of fixed rate loans, the rates have been increased from 8 per cent to 8.25 per cent for loans up to six years while loans above six years and up to 12 years will carry an interest rate of 8.75 per cent. Given the hardening of interest rates, the bank has decided not to extend housing loans for tenures above 12 years. The bank has also hiked the interest rate by 25 basis points from 5.75 per cent to 6 per cent on domestic deposits up to Rs. 15 lakh for 180 days to less than one year and from 6.75 per cent to 7 per cent for deposits of three years and above but less than five years. Similarly, the interest rate for deposits of Rs. 15 lakh and above for one year and above will be higher by 25 basis points at 6.75 per cent than the rate applicable to deposits of less than Rs. 15 lakh.

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