Standard Chartered India today reported 16 per cent drop in its 2012 pre-tax profit at $676 million due to lower corporate activity and currency fluctuations, but its coveted position as the third largest profit centre for its British parent is intact.
StanC Regional Chief Executive for India & South Asia Sunil Kaushal, while announcing the numbers here today, blamed decline in operating profit to the poor macroeconomic conditions in the country, which saw its cash—cow business of wholesale banking getting impacted.
“The performance was impacted by a difficult macro environment, combined with lower corporate activity and currency headwinds,” Kaushal said, adding that in constant currency terms, the drop is only 4 per cent.
Notably, between 2011 and 2012, the rupee declined a steep 15 per cent against the US currency. The average rupee- dollar exchange rate was 46.63 to the dollar in 2011 against 53.43 in 2012, he said.
For the group as a whole income grows 8 per cent to $19.07 billion, led by wholesale banking income of $11.78 billion, taking the operating profit to $6.9 billion, up just 1 per cent over 2011, Kaushal said.
Kaushal said India operations retained the coveted position of the third largest profit centre for its Asia—focused parent, after Hong Kong and Singapore, with a revenue share of a little over 10 per cent.
He also said despite rising bad loans in the domestic banking system, the Standard Chartered reported lower impairment charges which declined to $156 million in the reporting period from $172 million a year ago. As the portion of its total loan book, the impairment charges stood 9 per cent, he said.
Total income of the foreign bank in India, which is the largest MNC lender in terms of foot print with 99 branches, also declined 12 per cent to $1,585 million, from $1,805 million in 2011.
The bank’s operating profit before impairment also declined 15 per cent from $976 million to $832 million, which would have been only 4 per cent but for the rupee depreciation.