Standard Chartered Bank has tripled its provision for bad debts for its Indian operations to $59 million in calendar year 2003 as compared to $21 million in the preceding year. | |
| This is largely on account of defaults arising from the credit card business, said StanChart Bank CEO Chris Low. |
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| According to the bank's annual report 2003, "the bad debt charge increased by $21 million to $59 million. This was largely driven by increased provisions on a specific vintage of the card portfolio." |
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| Bad debts emerged from the bank's credit card portfolio launched in 2001. "We have made the suitable provisions with the help of a strong balance sheet," said Low. |
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| The bank has reviewed the experience with plastic card programme and has taken steps to improve the system, said bank officials. |
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| According to the bank's annual review report 2003, StanChart aggressively grew its card (credit, debit and co-branded) business. StanChart revenue for its Indian operations has increased by 10 per cent to $244 million. |
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| According to the bank's global balance sheet, "more than half this growth was customer driven growth in trade and lending, custody and global markets. |
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| Traditionally, StanChart's consumer banking business in India has been driven by liabilities, resulting in short term margin pressure, stated the report. |
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| The bank is now expanding its mortgage book, indicating that assets would grow strongly, thereby generating good revenue growth in 2004, the review said. |
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| On the rise in bank's revenue, its operating profits for the domestic market grew from $114 million in 2002 to $150 million in 2003, reflecting a rise of 32 per cent. |
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| "We are the most profitable foreign bank in the country today and the fourth in the entire banking system," said Low. |
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