ICICIdirect.com's report on Syndicate Bank
"Syndicate Bank, quarterly earnings of Rs 452 crore, up 2.7 percent YoY, were in line with our estimates of Rs 457 crore. Provisioning expenses were higher than anticipated at Rs 489 crore. However, this was offset by lower than expected operating expenses (down 19 percent QoQ) and strong growth of 25 percent YoY in other income led by treasury gains. Asset quality stress is emerging as slippages more than doubled sequentially to Rs 1304 crore. However, fresh RA during the quarter at Rs 883 crore was lower than the previous few quarters. Total outstanding RA book now stands at Rs 9657 crore (6.5 percent of the loan book). We have revised our earnings lower to factor in strain in the asset quality and slightly lower margins. Considering the current scenario and despite revision in earnings, return ratios with RoE of 18 percent and RoA of 0.9 percent are still healthy. We maintain the multiple of 0.7x FY15E ABV and BUY, thereby reducing TP to Rs 110 (Rs 122 earlier) as we turn cautious about the recent asset quality weakness," says ICICIdirect.com research report. Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
