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India is eighth largest contributor

India is eighth largest contributor
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First Published: Mon, Mar 02 2009. 09 56 PM IST
Updated: Mon, Mar 02 2009. 09 56 PM IST
Mumbai: India has emerged the eighth largest contributor to the Hongkong and Shanghai Banking Corp. Ltd’s global profits for the year ended 31 December. In the previous year, India was placed two notches below, 10th.
Indian operations reported a 25.9% rise in profit before tax to $666 million (Rs3,449 crore) for 2008 against $529 million in 2007.
Rise in revenues from commercial banking and global banking and markets business helped boost HSBC’s profits in India even as the bank saw a substantial increase in bad loans in its consumer finance business and, consequently, higher provisioning.
The loss in the personal financial services business in India increased from $70 million to $155 million. Profits from commercial and global banking and markets business increased by 34% each, to $118 million and $578 million, respectively.
The bank has not disclosed impairment charges for India. However, the loan impairment charges in the personal financial services and other credit risk provisions for rest of Asia, including India, West Asia and Australia, increased to $863 million, from $552 million.
The bank’s non performing loans in the personal finance business, as a percentage of average advances increased to 2.41% from 1.75%.
HSBC recently received three branch licences from the Reserve Bank of India. These branches will be opened in Guwahati, Nashik and Surat, taking the bank’s branch network here to 50.
HSBC’s India CEO and group general manager Naina Lal Kidwai said: “We are investing in the personal financial services. The growth in the consumer finance portfolio is flat. Considering the current collection environment and credit market it will be hard to see any bank grow that business.”
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First Published: Mon, Mar 02 2009. 09 56 PM IST