Syndicate Bank has come out with its Q1 results. Their net profit took a beating due to NPA provisioning, indicating a rough road ahead.
Net revenues increased marginally by 1.51% YoY, but net profit plunged by 73.80%.
Operating margin decreased from 17.85% in Q1FY16 to 12.22% in Q1 current year. This was mainly due to operating expense increasing by nearly 43% YoY. Employee cost and other expenses rose by 50% and 30% respectively.
The provisions have increased by 40% YoY, but the good thing is if we consider QoQ it has decreased by 72.08%. Meaning, most of the NPA’s have now been provisioned.
Though the advances contracted by 0.72% QoQ, but the gross NPA and net NPA increased by 11.5% each QoQ.
For Q1 FY16 28.20% of PBT was paid as tax, but for the same quarter last year 45.95% of PBT was paid as tax. This is likely an anomaly last year.
The share holding percentage of Govt of India increased from 65.17% last quarter to 69.32%. (This is on account of the bailout given to public sector banks in the quarter)
The only good thing happening over here is writing back of the provisions amounting to 68.82 Crs.
Syndicate bank has gone a step ahead and has started to make a 2% extra provision on sub standard assets.
Stock prices didn’t react much to the results, and closed 1.3% up.
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