Having established its foothold in India, Standard Chartered Bank (India) is now looking at other emerging business opportunities emanating from smaller tier-I and tier-II cities and towns. With the big year (in 2009) for consolidation nearing, the UK-based entity, Standard Chartered Bank has started picking up stakes in some of the Indian banks. ?Just like any other foreign player interested in India, we too have invested an up to 5% stake in a few Indian banks,? said Neeraj Swaroop, regional chief executive, India & South Asia, Standard Chartered Bank. The bank is keen on having a substantial stake in any potential bank when the Reserve Bank of India relaxes investment norms in 2009. The bank is also seeking a 5% stake in other banks that have their presence in Tier-I and Tier-II cities.
Standard Chartered aims at playing an active role in the mergers and acquisitions of the Indian SME sector. ?Since there is an increasing interest among Indian companies in Asian countries over the US and Europe, we will be able to service deals more effectively due to our presence in Southeast Asia and China. To encash in the SME sector boom, especially in feeder cities, substantial strategic equity participation in the future by Standard Chartered Bank cannot be ruled out,? said Swaroop.
?The years 2005 and 2006 were historic years for us as we achieved several milestones with a number of strategic alliances and acquisitions that will extend our customer or geographic reach and broaden our product range,? says Swaroop. Since the early 1990s, Standard Chartered has focussed on developing its strong franchisees in Asia, the Middle East, and Africa, using its operations in the UK and North America to provide customers with a bridge between these markets. It also focusses on consumer, corporate, and institutional banking, and on the provision of treasury services. In the new millennium, the group acquired Grindlays Bank from the ANZ Group and the Chase Consumer Banking operations in Hong Kong in 2000.
?The latest financial result has made India the second largest contributor (17% share) after Hong Kong (30% share) to the global profits of Standard Chartered Bank,? Swaroop said, adding that in the year 2007, their share of the wholesale banking segment to the revenue income generated from Indian operations was around 65%. Standard Chartered Bank (India) announced a 71% jump in its operating profit at Rs 2,760 crore ($690 million) for the calendar year 2007, as compared to Rs 1,612 crore ($403 million) from its Indian operations a year ago. The total income of the bank from its Indian operations has increased to Rs 5,200 crore ($1.3 billion) from Rs 3,268 crore ($817 million) on a year-on-year basis.
?Within the wholesale business segment, areas like transaction banking, risk management services, and corporate financing witnessed maximum growth. On the consumer banking side, our wealth management business witnessed a phenomenal growth,? he said. The bank has also been lucky enough in seeking approvals from the Reserve Bank of India (RBI) to open 40 new branches and 300 ATMs across the country in the current year. On the subprime crisis, Swaroop says, ?Although Standard Chartered has a limited exposure in the US, the group?s US and Korean operations had to write down a cumulative sum worth $300 million due to the effect of the subprime mortgage market crisis.?
The Standard Chartered group was formed in 1969 through a merger of two banks: The Standard Bank of British South Africa, which was founded in 1863, and the Chartered Bank of India, Australia and China, founded in 1853. Provisions had to be made against third world debt exposure and loans to corporations and entrepreneurs who could not meet their commitments.