Standard Chartered India's pre-tax profit rises 3% in 2013

The lender's wholesale banking income up by 7% to $1.2 billion

Standard Chartered Bank on Wednesday said its pre-tax profit in India rose three per cent to $697 million in calendar year 2013. The profit growth was capped on account of fluctuations in the currency exchange rate, higher loan impairment charge, reduced valuation and write-off in its principal finance portfolio (which includes its private equity and other investments), and a charge on bond exposure.

Income grew seven per cent to $1.7 billion. The loan impairment increased to $195 million, while other impairments expanded to $105 million during the year. However, in constant currency, the bank’s India profit was up 11 per cent, while its income grew 17 per cent.

“We have delivered a resilient performance, with both income and profits growing by double digits in constant currency, in a very challenging environment with muted corporate activity and a currency drag of approximately 10 per cent,” said Sunil Kaushal, regional chief executive for India and South Asia at Standard Chartered Bank, in his post-earnings comments.

The lender’s wholesale banking income rose seven per cent to $1.2 billion, aided by corporate finance, foreign exchange and rates, and cross-border activity from Indian clients. Operating profit of wholesale banking, however, fell one per cent to $577 million.

Consumer banking income grew six per cent to $466 million driven by mortgage, credit cards and personal loans, high-value and small and medium enterprises (SME) businesses. The operating profit of retail banking operations was up 26 per cent at $120 million. “Both businesses have grown income well with consumer banking profits exceeding $100 million for the first time. Our outlook for 2014 is cautious and we expect the macro-environment in India to remain somewhat challenging and uncertain,” said Kaushal.

Globally, 2013 was a difficult year for the bank. Tough market conditions resulted in the bank’s income shrinking by one per cent, while its profit before tax declined seven per cent globally.