StanChart operating profit up 71% at Rs 2,760 crore

Written by Banking Bureau | Mumbai, Feb 26 | Updated: Feb 27 2008, 06:03am hrs
Standard Chartered Bank (India) has 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) worth profit contribution 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.

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.

Neeraj Swaroop, regional chief executive, India & South Asia, Standard Chartered Bank said, In the year 2007, the share of our wholesale banking segment to the revenue income generated from Indian operations was around 65%.

Expenses for the year 2007 increased by 41% at Rs 2,112 crore ($528 million) as against Rs 1,500 crore ($375 million) in the calendar year 2006. 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.

We have sought an approval from the Reserve Bank of India (RBI) to open 40 new branches and 300 ATMs across the country in the current year, added Swaroop.

He said, Although Standard Chartered has a limited exposure in the US, the groups US and Korean operations had to write down a cumulative sum worth $300 million due to the effect of subprime mortgage market crises.

Sundeep Bhandari, managing director, head, global markets, South Asia, Standard Chartered Bank stated that inspite of the global liquidity crunch, India is still expected to attract a huge influx of foreign funds, since no other country in the world, apart from China, is growing at over 7% annually.

By the end of March 31, 2008, the rupee is expected to stabilise at 39.50 exchange rate against the US dollar, he said.

The inflationary pressure in India could compel RBI to raise the CRR by 100 basis points in the long run. However, I do not foresee an immediate change in the interest rate scenario in the near future, said Bhandari.