Jan 23, 2013, 07.08 PM | Source: CNBC-TV18
Public sector lender Syndicate Bank reported a surge of more than 50.3% in net profit (year-on-year) to Rs 508 crore, aided by a one-off tax write back of Rs 141 crore.
“ We have done very liberal provision to ensure that our future burden is not there ”
- Madhukant Girdharlal Sanghvi (CMD)
Speaking to CNBC-TV18 about the financial performance of the bank, chairman and managing director Madhukant Girdharlal Sanghvi said, "The tax back credit has been utilized for providing extra provisioning. We have improved our NPA provision coverage to 83 percent, which is one of the highest of the industry."
Net interest income (NII) grew by 5.6 percent to Rs 1,399.8 crore from Rs 1,325 crore during the same period. Their restructured assets marginally increased by about less than Rs 1000 crore in this quarter.
Bank's loan book in Q3 grew 17% on year-on-year basis. "This is marginally less than the market. But the bank is taking all efforts to improve it in the quarters ahead. On the retail assets side, we have reduced interest rates and process fee charges have been waived. We are very confident of growing the book nicely in this quarter," he added.
At 15:01 hrs Syndicate Bank was quoting at Rs 132.00, down Rs 7.60, or 5.44%.
Below is the edited transcript of his interview to CNBC-TV18
Q: While your asset book that is gross and net NPLs are lower from what they were in September, we don’t see any growth in net interest income or in profit. Why is growth suffering so much?
A: The profit is not down. It is up by 41 percent in 9 months and year to year it is a 50 percent growth.
Q: The profit is higher because you have written back tax credit of Rs 140 crore.
A: The tax back credit has been utilized for providing extra provisioning also. We have improved our NPA provision coverage to 83 percent. This is one of the highest of the industry. We have done extra provision for wage revision. We have done very liberal provision to ensure that our future burden is not there.
Q: A lot of other banks have also reported loan growth and some of them have shown moderation in it. How do you see those prospects?
A: Loan growth side we have year to year growth of 17 percent, marginally less than the market. However, considering the economic condition and the banks high level of NPA in the past, we have done entry level barriers of new business group. We have selectively taken the customer.
Last quarter growth has substantially improved. Lot of exercise is on the way, we will be able to do in next quarter. On retail assets side also we have reduced interest rates. Process fee charges are waived. We are very confident of growing the book nicely in this quarter.
Q: Can you tell us what is your net interest margin in Q3 and how does it compare to Q2?
A: This is 3.27 in December 2012 quarter. In September it was 3.26. Compared to the year back it is marginally less. However, in present scenario, 3.27 should be appreciated. Net interest income is also up by 9.60 percent in 9 months.