Mumbai: Standard Chartered Bank’s India operations’ pre-tax profit has risen 19% to $624 million (Rs2,883 crore) for the first half of the year ended June 2010, making India the single largest contributor to Standard Chartered Bank Plc’s profit, replacing Hong Kong, which has seen a 11% dip in pre-tax profit to $511 million.
The growth in profit is driven by income from both corporate as well as retail loans. The bank has also set aside less money to provide for bad assets.
Among business segments, Indian wholesale banking operations continued to be the largest profit contributor to the group. Wholesale banking operations profits were up 14% to $517 million.
The bank’s Indian consumer banking operations posted a pre-tax profit of $53 million for the first half of 2010, up 121%.
“We have participated in some of the big deals, which include Bharti-Zain and GTL. Both the consumer banking and wholesale banking operations have shown healthy growth,” said Neeraj Swaroop, regional chief executive for India and South Asia, Standard Chartered Bank. “The bank’s deposit base went up 30% to $13.1 billion while advances increased by about 23% to $10.2 billion in the first half of 2010.”
According to him, the second half will also be good for the bank as economic activity in India is picking up.
“We would continue to see credit growth in range of 19 to 20%,’” said Swaroop. So far this year, the loan book of the Indian banking industry has grown by about 21% and the Reserve Bank of India’s projection for the industry’s credit growth for the year is 20%.
The London-listed company, which is the first foreign entity to list Indian depository receipts, or IDR, on Indian bourses, has announced a dividend of 23.35 cents.
IDR is a rupee-denominated instrument in the form of a depository receipt against the underlying equity of the issuing company. Ten IDRs represent one share of Standard Chartered Bank.
After hitting a high of Rs125 during the day, the Standard Chartered IDR ended on Wednesday down 4.38% at Rs117.90 even as the benchmark index of the Bombay Stock Exchange, the Sensex, gained 0.57% to close at 18,217.44 points.
On the London Stock Exchange, the bank’s scrip was down 4.7% as on 8.10pm India time.
Standard Chartered Bank Plc has posted a 10% increase in operating profit to $3.12 billion for the period January to June 2010, supported by growth in the consumer banking and corporate lending income and lower impairment charges.
The bank said consumer banking profit rose by 85% to $643 million in the January-June period, while wholesale banking profit rose by 10% at $2.47 billion.
The loan impairments for the group fell by 60% to $437 million during the first half of the year from $1.09 billion a year ago.
Loan impairments or provisions for non-performing assets or NPAs for the bank’s India operations have also come down by 56% to $43 million as against $97 million.
“We continued our strong performance in the first half of 2010 and both our businesses have had an encouraging start in the second half. Despite the regulatory and economic uncertainties, our focus on the basics of banking will continue to hold us in good stead,” StanChart chairman John Peace said in London.
PTI contributed to this story.