Mrutyunjay Mahapatra, MD & CEO, Syndicate Bank, talks about December quarter results, global business contribution, NPAs and slippages as well as fundraising plans of the bank during an exclusive chat with Mansee Dave, Zee Business. Edited Excerpts:

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Q: What are the highlights of the third quarter of FY20?

A: Quarter's highlight is that our global business has crossed Rs 5 lakh crore-mark and the bank's net profit has gone up to Rs 435 crore from Rs 108 crore posted in the same quarter of the corresponding fiscal. And, it stood at Rs 251 crore in the second quarter of FY20. Thus, we have grown percentage-wise as well as absolute figure wise. Our operating profit has increased 111% to Rs 1,336 crore from Rs 634 crore on a Year-on-Year (YoY) basis. Our CASA deposit has grown by 8.13% on YoY basis. The gross NPA ratio has reduced from 12.54% to 11.33% in one year, while the net NPA ratio has decreased from 6.5% to 5.94%. The provision coverage ratio has increased from 64.81% 69.28% in December. Besides, the bank's capital base is very strong and our CRAR ratio which stood at 12.46% a year ago has increased to 14.36%.

 

Q: Name the segment/account where new NPAs has increased in the December quarter? 

A: Slippages were reported in two-three big accounts like DHFL and Religare Finvest, which were the performing assets till the last quarter. With this, the slippage has increased from Rs 2,185 crore to Rs 3,239 crore.

 

Q: Let's talk about the sector. So, let us know the segment where there are stress and the segment where maximum recovery is expected?

A: Stress has been felt in old NBFCs like DHFL and Religare Finvest, the big accounts that have turned NPAs for us. Apart from this, there is no other sector where slippages were felt.

 

Q: Do the bank has plans to raise funds soon? 

A: 11.25% of capital adequacy is the regulatory requirement. And, our capital adequacy stands at 14.36% at present. Thus, we have enough capital for business growth. That's why there is no need to raise much capital.

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Q: The bank's other income has increased from Rs619 crore to Rs914 crore in this quarter. Where did you see this jump coming from?

A: There is a slight jump in recovery in return of account as well as in commission brokerage and cross-selling income. Our commission brokerage has grown by 17.51% (QoQ) and 10.05% (YoY). The recovery in return of account, which becomes of part of other income, has from Rs220 crore in the last quarter to Rs386 crore.