State-owned lender Syndicate Bank’s second quarter profit crashed more than 75% from a year ago to R82.42 crore as provisioning for bad assets continued to take a toll on the bank’s bottomline.
Net interest income (NII), or the difference between interest earned and interest expended, also dropped 3.2% year-on-year (y-o-y) to R1,544.5 crore. The bank earned interest to the tune of R5,783.06 crore and non-interest income of R791.87 crore during the July-September quarter.
Net interest margin (NIM) improved 11 basis points (bps) to 2.33% at the end of September from 2.22% at the end of June, but worsened 13 bps from the end of September 2015.
The bank underwent a 96.3% y-o-y jump in provisioning, which stood at R864.14 crore for the quarter under review. The gross non-performing asset (NPA) ratio rose to 7.72% from 7.53% a quarter ago, while the net NPA ratio improved marginally to 5.03% from 5.04% at the end of June. The provision coverage ratio stood at 53.69% at the end of September. NPAs worth R1,187 crore were upgraded or recovered during the quarter, marking a rise of 43% y-o-y and 130% on a sequential basis.
The bank’s deposits grew 0.6% y-o-y to R2,65,342 crore during the quarter and advances fell marginally to R2,07,965 crore from R2,08,178 crore in the year-ago period. The cost of deposits fell to 6.06% from 6.45% in the year-ago period.