Standard Chartered Bank’s operating profit from Indian operations fell 16 per cent on the back of a sharp rise in bad loans amid subdued corporate loan growth and weak rupee.
The UK-headquartered foreign lender’s India operating profit was lower at $676 million in 2012 from $804 million in 2011. Total income dipped 12 per cent to $1,585 million ($1,805 million in 2011).
The foreign lender’s consolidated profit before tax increased marginally by 1 per cent to $6.9 billion. India accounted for about 10 per cent to foreign lender’s overall profitability.
Indian operations are the third most profitable for the bank after Hong Kong and Singapore.
The gross non-performing assets ratio increased sharply to 6.7 per cent compared with about 3 per cent last year.
According to Sunil Kaushal, Regional Chief Executive, India and South Asia, a large proportion of the wholesale banking portfolio got impacted due to the slowdown in GDP growth, subdued corporate activity and currency depreciation. This found a reflection in the bank’s income and profitability from India.
Total advances from India branches grew 11 per cent during the financial year to about Rs 66,000 crore ($12 billion), while deposits increased by 7 per cent to Rs 74,000 crore ($13.5 billion).
The wholesale to retail banking ratio in the total advances stood at about 75:25 respectively. Net interest margins during the year increased to 3.5 per cent from 3.1 per cent last year.
“We expect India to remain a key engine of our growth and expect FDI and offshore investments to grow. We are cautiously optimistic and see global environment easing,” Kaushal said.
Standard Chartered has added three branches beginning January, taking the total number of branches to 99 across 42 cities.