StanChart India profit up 50% to $320 million

Standard Chartered Bank's India operations has posted a 50 per cent rise in net profit to $320 million in the first half of 2007 from $213 million in the corresponding period last year.

The rise in profit is driven by a 48 per cent rise in revenues. India's contribution to the group's profit has risen to 16.2 per cent from 12.6 per cent in December 2006. India has dethroned Korea to become the second largest contributor to the group bottom line after Hongkong.

"India is a significant market for the bank. Both India and China are the pillar of growth for the bank. We have infused around $280 million of fresh capital into the India operations in March. We are quite comfortable when it comes to capital. We have been pumping in capital in excess of $100 million into the bank every year. We will infuse capital if there is a business opportunity,'' said Jaspal Bindra, regional chief executive officer, South East and South Asia, Standard Chartered Bank. 
 

HOW OTHER FOREIGN BANKS FARED
(Rs crore)	Net profit		% change
	2006	2007
Citibank	705.55	900.00	27.56
HSBC	514.92	845.61	64.22
ABN Amro	241.68	385.35	59.44
Deutsche Bank	125.93	218.22	73.29
Bank of America	144.56	195.54	35.26
JP Morgan Chase Bank	72.93	106.79	46.43

The bank's total income increased to $563 million from $380 million in the first half of last year.

"Wholesale banking operations have been a major contributor to the bank's profitability. We continue to invest in the consumer banking business. We have made specific investments in technology, premises which is adding new branches and recently we also started the private banking business. Wealth management, SME and personal loans business are seeing good growth. The consumer banking business will be a large business in the coming months,'' said Neeraj Swaroop, chief executive officer, India, Standard Chartered Bank.

The wholesale banking profits soared 70 per cent to $280 million from $165 million. While the profit on the consumer banking business has dipped by 16 per cent to $40 million against $48 million. "The bank has been growing at a compounded growth rate of 20 per cent to 25 per cent for the last four to five years. We hope to sustain this rate of growth. The corporate banking business will continue to show good growth. On the consumer banking side, we have adopted a conscious strategy to go slow on mortgage and credit card business as the margins in these businesses are coming down. As a bank we have limited access to low cost deposits hence we don't have the strategic capacity to fund mortgage loans,'' added Swaroop.

"We are a strong player in the cards business. The cards business for the industry as a whole has been going through a transition. Our focus is to build a good portfolio. We are active in the unsecured loan space as we have better credit modelling structures. secured loans tends to get commoditised faster,'' added Swaroop.