HSBC India FY11 net soars 89% to Rs 1,582 cr

The country's second-largest foreign lender HSBC India has posted a whopping 89% rise in net profit at Rs 1,528 crore for the fiscal ended March over Rs 810 crore in FY10 on a massive dip in bad loans.

"HSBC India, with an increase of 89% in net profits, has put in a strong performance, signifying the underlying strength of our business. India is an important part of the HSBC Group strategy," HSBC India Managing Director and Asia-Pacific Country Head Naina Lal Kidwai said in a statement here today.

"The bank has a strong franchise here, and we will continue to build and strengthen our business in the country."

Kidwai attributed the robust numbers to a massive drop in net non-performing assets (NPAs), which came down to 0.91% in FY11, from a high 2.31% in FY10.

The bank's current account savings account (CASA) also rose by Rs 373 crore, with the ratio improving to 50% from 48%.

"Our strategy of selective lending, mainly to our existing customers and largely on a secured basis, has borne fruit as evident from the 86% drop in provisions, and our lower NPAs. We have also benefited from our strong CASA ratio, among the best in the industry," HSBC India Chief Executive Officer Stuart A Davis said.

The second-oldest foreign bank in India also said its return on assets more than doubled to 1.68% from 0.88%, while the operating expenses rose 12% due as the bank hired more people, invested in systems and brand building in the country during the year.

The London-headquartered lender said its advances in India rose to Rs 27,401 crore in FY11 from Rs 23,475 crore in FY10, reflecting strong credit offtake.