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Syndicate Bank Net profits plunge by 73% YoY : Result Analysis


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%.

heck out the Daily Results Tracker here

Other major analysis points are:

  • 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.

Syndicate Bank Q1FY17 Result
Stock prices didn’t react much to the results, and closed 1.3% up.
Syndicate Bank Q1FY17 Share Price Movement

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Disclosure: The authors at Capital Mind have positions in the market and some of them may support or contradict the material given above, or may involve a direction derived from independent analysis.


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