StanChart India crosses $1 bn operating profit1 min read . Updated: 03 Mar 2010, 10:40 PM IST
StanChart India crosses $1 bn operating profit
Mumbai: Strong revenue growth from corporate banking helped Standard Chartered Bank Plc’s India operations post a 19% growth in operating profit to $1.06 billion (around Rs4,865 crore) for the year ended December, making it the first foreign bank in the country to cross $1 billion in operating profit.
India continues to be the second largest contributor to the group’s profitability after Hong Kong. India’s share in the group profit for the year was 20.5%.
Hongkong Shanghai Banking Corp. Ltd, another UK-based bank that announced its earnings on Monday, saw its Indian operations post a 44% decline in operating profit for the year ended 31 December to $374 million from $666 million a year earlier.
The drop was on account of huge losses in retail and commercial banking as well as lower profits in global markets.
Standard Chartered, which makes at least 90% of earnings in Asia, said it will raise as much as $750 million by selling its stock in India as the lender posted a record profit for 2009.
The bank will offer Indian depository receipts, or IDRs, in the first half of this year, chief executive officer Peter Sands told reporters in London after India became the second of the bank’s units after Hong Kong to post a $1 billion profit.
“There is a race for which will be our biggest market by profits this year," Sands said in a statement. “We have built a superb franchise in India and, this year, it is our intention to open a new chapter in our long history there" with the listing.
The bank said its business in India was now “just a whisker" behind the Chinese city in terms of profit.
“Regulatory clearances (for IDRs) are not a show stopper; they are procedural in nature," said Neeraj Swaroop, regional chief executive, Standard Chartered Bank, India and South Asia.
The bank has appointed Goldman Sachs, JM Financial Ltd, UBS AG, Kotak Mahindra Capital Co. Ltd, SBI Capital Markets Ltd and DSP Merrill Lynch Ltd as the lead managers to the issue.
“In India, the problems centre on unsecured credit card and instalment loan portfolios," a Standard Chartered statement said.
“The consumer banking business has seen strong recovery and the loan impairments are stabilizing," said Swaroop.
Jon Menon and Kelvin Wong of Bloomberg contributed to this story.