Syndicate Bank share price jumped more than 2 per cent in the early hours of trade on Wednesday after the public-sector bank reported yesterday that its net profit in the December quarter grew by almost 300 per cent to reach Rs 434.82 crore, in comparison to Rs 107.99 crore recorded in the year-ago period. The rise in net profit was aided by shrinking bad loans as the bank made recoveries from Essar Steel and Ruchi Soya.
Syndicate Bank reported a rise in total income to Rs 6,313.57 crore while gross non-performing assets (NPA) of the bank came down to 11.33 per cent from 12.54 per cent in the same period last year. In absolute terms, gross NPAs stood at Rs 25,330 while the bank had reported the same at Rs 26,184.66 crore in the year-ago period.
The bank is due to be merged into Canara Bank as per the Finance Minister’s plan to restructure banks to make them efficient and improving their operations. In a regulatory filing Syndicate Bank said, “The Board of Directors in its meeting held on September 13, 2019, has considered and accorded its “In principle approval” for amalgamation of Syndicate Bank into Canara Bank subject to all applicable approvals-and the process is in progress.”
Talking to CNBC TV18 on Wednesday morning, Syndicate Bank MD & CEO, Mrutyunjay Mahapatra said, “We have some large slippages on account of some Non-Banking Finance Companies (NBFCs) and on account of that slippages stand at Rs 3,239 crore. Recoveries have almost doubled.”
Recoveries stood at Rs 2,216 crore in the quarter while the same was Rs 1,134 crore in the previous quarter. Mahapatra said that the bank is aiming at a 7 per cent loan growth aided by measures taken by the bank such as specialised housing loan verticals and retail loan verticals.
Benchmark indices were up 407.39 or 0.99 per cent at 41,623.53 points while the 50-stock Nifty was trading at 12,220.90 up by 0.93 per cent.