Eastern focus pays off as StanChart posts profit
04 March 2009
Standard Chartered Bank, the UK's second-largest bank which focuses on Asia, Africa and the Middle East, has defied the gloom afflicting the sector by reporting a rise in profits.
The bank said pre-tax profit for 2008 was $4.8 billion, up 19 per cent compared with a year earlier. It added that it was on a "firm footing" for 2009.
StanChart's bottom-line was greatly buoyed by its Indian operations. Standard Chartered Bank India said in Mumbai that its operating profit increased 37 per cent to $943 million (Rs 4,914 crore) in 2008 despite a rise in provisions for impaired assets.
Rising profits from wholesale banking helped StanChart India to post a pre-tax profit before of $943 million for the calendar year 2008. The figure is inclusive of its $146 million proceeds from the sale of its asset management business to the Indian Development and Finance Corporation.
The wholesale banking business in India was was the largest profit generator for the group at $726 million. India continues to remain the second-largest contributor to the profits of StanChart, accounting for a 21 per cent share against 17.1 per cent in 2007. If the sale proceeds of AMC are excluded, India's share stands at 17.44 per cent.
Hong Kong, which has so far been the largest contributor to the profit, witnessed a 15 per cent fall in PBT to $1.01 billion.
Like India, Singapore was another market where profit surged by 67 per cent to $744 million. The results are, however, not comparable since the 2007 numbers did not include the income or profits of American Express Bank, whose integration was completed last year.
Its provisions for asset impairment rose 74 per cent to $157 million (Rs 816 crore) at the end of 2008, as against $90 million last year. ''The rise is mainly on the consumer banking side and concentrated on personal loans and credit cards, though there is no significant change in credit cards. But it is lower than the industry and well within our parameters,'' said Standard Chartered regional chief executive officer Neeraj Swaroop.