Mumbai: Good business in commercial and retail banking operations during 2006-07 helped Hongkong and Shanghai Banking Corporation Ltd (HSBC) India post a 64% rise in its net profit to Rs846 crore from Rs515 crore in the previous year.
Bank of America (BoA), another foreign bank, but one which caters to the banking needs of Indian corporations and does not have retail operations in the country, reported a 35% rise in its net profit to Rs195.5 crore in fiscal 2007 from Rs144.5 crore a year earlier. The revenues of this wholesale bank rose by 24% to Rs674.4 crore from Rs544 crore in the previous year.
“The continuing growth in profit has been driven by strong performance across business lines,” said Naina Lal Kidwai, group general manager and CEO, HSBC India.
The total assets of HSBC India grew 47% in 2006-07 to Rs54,987 crore from Rs37,473 crore in the previous year. The deposit base of the bank grew 40% to Rs34,825 crore over the same period. The HSBC release said that the group is keen on aggressively growing its India franchise.
During the year, HSBC India’s parent pumped in an additional Rs904 crore of capital. The bank has retained a profit of Rs533 crore to deploy in its India operations.
Unlike HSBC, BoA is not in a hurry to infuse fresh capital. “We have enough capital now and want to deploy it prudently,” said Vishwavir Ahuja, MD and country executive officer for India at BoA.
As of March 2007, the capital base of the bank’s Indian operations stood at Rs1,777 crore. Ahuja attributed the bank’s 35% net profit growth to the increased finance needs of Indian corporations.
During the year, BoA grew its profits by providing structured finance products to large corporate clients. The bank’s focus will remain on large corporations, from whom it earned 65% of its revenues. “The need for structured products is becoming a growing necessity for large Indian companies,” Ahuja said. He is optimistic that the market will further open up and allow more sophisticated products that will service the needs of Indian enterprises. The bank has already got credit default swaps in place—a hedging instrument that will soon be made available to Indian companies.