Syndicate Bk logs 50% profit rise; plans raising Rs 1,500 cr

Jan 23 2013, 22:03 IST
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SummarySyndicate Bank has reported a 50.38 pct growth in net profit at Rs 508.49 crore for third quarter.

Syndicate Bank on Wednesday said it is mulling raising Rs 1,500 crore as equity capital soon to meet its business needs, while logging a 50.38 per cent growth in net profit at Rs 508.49 crore for the third quarter ended December 31, 2012.

"We have the Board approval to raise Rs 1,500 crore by tapping alternate markets. It will be either QIP placement route or by the Rights Issue. The capital is to support our growing requirements," said M G Sanghvi, Chairman and Managing Director, Syndicate Bank.

"As the Board has given its approval, to the extent possible we would like to do before March (this year) subject to approvals of Reserve Bank of India and Government of India," he added.

He said the board has also given approval to raise Rs 2,000 crore through issuing tier-2 bonds and the timing of the issue will be decided later depending on the market conditions and requirement.

Next year, the state-run bank may raise $500 million through it London Branch from global markets, he said adding that this depends on the global business growth.

Last month, it had raised Rs 1,000 crore through issue of Unsecured Non-Convertible Sub-ordinated Lower Tier II Bonds.

Meanwhile, announcing Q3 results, he said, the bank has reported a 50.38 per cent growth in net profit at Rs 508.49 crore for the third quarter ended December 31, 2012.

The bank had a net profit of Rs 338.12 crore in the October-December quarter of the last fiscal.

Total income has increased to Rs 4,489.90 crore during the third quarter, from Rs 4,214.

35 crore for the quarter ended December 31, 2011, the bank chief said.

"We have reduced dependence on high cost deposits. There is qualitative Credit growth that is also contributed... we have enhanced over recovery and upgrading activity, which helped us to improve our net interest income and net interest margin for the quarter," he said.

The bank has also launched aggressive marketing efforts to attract mid corporate sector to improve credit growth, Sanghvi said when asked the reason for high growth.

Interest income of the bank grew by over 6 per cent to Rs 4,220.59 crore during the three-month period ending December 2012. In the year-ago period, the interest income stood at Rs 3,973.94 crore.

Replying to a query, he said they expect more than 20 per cent growth in credit off-take and around 17 to 18 per cent growth in deposits next year.

CASA (Current Account, Savings Accounts) which currently constitutes 31.5 per cent is expected to grow by 0.5 per cent by the end of the current fiscal and another one per cent by the end of next fiscal, he maintained.

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