Firstcall Research report on Syndicate Bank
"Syndicate Bank, government owned bank, reported subdued second quarter results with Net Interest Income rising by an insignificant 1.47 percent. Net profit for the quarter rose on the same lines at 1.46 percent YOY. Net Interest Income, difference between interest earned and expended stood at Rs. 14113 mn against Rs. 13908 mn in the corresponding quarter of the previous year. Net profit stood at Rs. 4701.20 mn against Rs. 4633.70 mn in the corresponding quarter of the previous year. Net Interest Margin slipped by 37 basis points at 2.89 percent compared to 3.26 percent in Q2 FY13. Percentage of Gross NPAs to Gross advances stood at 2.88 percent against 2.47 percent in same period previous year, rising by 41 basis points, whereas percentage of Net NPAs to Net advances stood at 1.66 percent in Q2 FY14 against 0.92 percent in Q2 FY13 rising by 74 basis points."
"Asset quality of the bank is under stress due to economic slowdown. In spite of present stressful scenario, domestic CASA deposits increased by 15.5 percent YOY at Rs. 537200 mn against Rs. 465100 mn in Q2 FY13. In addition to that global deposits and advances grew by 22.44 percent and 20.61 percent respectively YOY. Global business also grew by 21.61 percent from 2846490 mn to Rs. 3461560 mn in the current September quarter. Provisions and contingencies have also declined by 29 percent YOY. Syndicate Bank has CAR of 11.84 percent as on 30th September 2013 and branch network of 3047 branch, with 43 branches being opened during Q2 FY14. Syndicate Bank is expected to perform well with the improvement in economic scenario in the coming quarters. We recommend 'HOLD' for the scrip at target price of Rs.115 for medium to long term," says Firstcall Research Report.
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