Syndicate Bank - 1QFY2014 Result Review - Angel Broking

Syndicate Bank reported weak operating performance for the quarter, as NII for the bank remained largely flat. Non-interest income grew at a healthy pace of 25% yoy. Overall, pre-provisioning profit for the bank grew at moderate 12.8% yoy. The bank witnessed significant asset quality deterioration during the quarter, as Gross NPA levels increased sequentially by 19.3%. The provisioning expenses for the bank declined by 4.6% yoy and hence, the sequential increase in Net NPA levels was much higher at 56.4%. Overall, earnings at PBT level grew by 40% yoy, however, as the bank had negative tax rate of 34.1% in 1QFY2013 as compared to positive 1.5% in this quarter, the earnings grew at muted 2.7% yoy.

At the CMP, the stock is trading at 0.4x FY2015E ABV. We maintain our Neutral recommendation on the stock.

Source : Equity Bulls

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