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India Research<br />
Chart 4: <strong>Syndicate</strong> <strong>Bank</strong>’s Capital Adequacy<br />
Source : Company, Dolat Research<br />
DOLAT CAPITAL<br />
� Change in headcount and employees <strong>com</strong>position: Over the period,<br />
proportion of officers has been increasing. Also, with CBS system in place and<br />
operational though not at optimum level, over a period of time going ahead,<br />
proportion of clerks & sub-staff should <strong>com</strong>e down. In FY12, total headcount<br />
came down by 5.6% to 26,904.<br />
Particulars FY07 FY08 FY09 FY10 FY11 FY12<br />
Officers 9,520 9,498 9,966 10,944 11,512 10,829<br />
Clerks 11,192 11,355 11,274 10,766 11,074 10,221<br />
Sub-staffs 3,648 3,803 3,828 3,859 3,702 5,854<br />
Part-time Sweepers 1,600 1,981 2,053 2,144 2,221 -<br />
Total 25,960 26,637 27,121 27,713 28,509 26,904<br />
Increase (%) 2.6 1.8 2.2 2.9 (5.6)<br />
� Credit <strong>com</strong>position likely to tilt in favor of retail, MSME and agriculture:<br />
In FY12, with respect to tenure of credit book, the bank’s credit <strong>com</strong>position<br />
increased in favor of term loans to 80% from 77% in FY11. In terms of security<br />
available for the credit book, proportion of secured loans increased to 67% from<br />
62%. Also, exposure to public sector entities came down but on sensitive<br />
exposure front, exposure to <strong>com</strong>mercial real estate (CRE) increased substantially<br />
to 4.4% from 2.5% in FY11. The increased exposure to CRE is backed by lease<br />
rentals.Essentially, in FY12, <strong>Syndicate</strong> <strong>Bank</strong> grew its credit book slower than<br />
the industry with taking higher amount collaterals.<br />
On maturity profile front, the bank’s credit portfolio average maturity remained<br />
almost same with 33% of credit book in upto 1 year maturity buckets as <strong>com</strong>pared<br />
to 32% in FY11. The bank’s cumulative domestic asset-liability mismatch (for<br />
maturity buckets up to 1 year) increased to 28% from 23% of total deposits in<br />
FY11. Shorter end of liabilities funded longer-term investment papers.<br />
On credit portfolio & exposure concentration issues, the bank de-risked its<br />
credit portfolio & exposure reflecting into lesser concentration in top twenty loan<br />
accounts and borrowers. Though, concentration of NPA jumped to 23.4% from<br />
8.0% in FY11. The sharp rise was mainly due to addition of two loan accounts<br />
in Q4 FY12.<br />
On credit book front, the bank’s key focus areas remain on retail banking<br />
(particularly Housing loans), MSME and Agriculture. In an effort to enhance<br />
advances yield, the bank would focus more on MSME, agriculture and some of<br />
the retail segments. More credit disbursement would be done at RO/branch<br />
level.<br />
July 13, 2012 <strong>Syndicate</strong> <strong>Bank</strong><br />
4
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