Stanchart invests $120 m in India arm

Foreign banking major Standard Chartered Bank has invested $120 million thus far this year in its Indian operations, which is expected to contribute over 10 per cent of its global profits in 2005.

"Last year, the Indian operations contributed about 200 million dollars or 10 per cent of the global profits. We hope to maintain it and grow it," Stanchart general manager (south Asia), Jaspal S Bindra said.

Standard Chartered Bank posted 39 per cent growth in profit before tax at $2.16 billion from worldwide operations in 2004, with revenues increasing by 13 per cent to $5.37 billion.The bank had expanded in key markets such as India, China, South Korea and Indonesia last year.

Bindra said the bank will continue to expand its Indian operations by opening 10-12 branches every year and focus on the booming retail segment.

To sustain the growth momentum, Standard Chartered Bank has invested $100 million in the in two tranches "" $50 million in June and an equivalent amount last month. The London-based bank has also infused $20 million in the non-banking finance company in India.

The bank is in no hurry to acquire banks as of now, but will explore such possibilities after government and RBI relaxes the regulations in 2010, he said.

While ruling out inorganic growth in near future, Bindra said Stanchart continues to focus on organic growth. Stanchart has also partnered other Indian banks in setting up an asset reconstruction company. Stanchart, which has a loan portfolio of over $500 million in India, eyes double digit growth in retail segment.

"The retail loan segment in India is growing by 30 per cent. We expect over 30 per cent growth," Bindra said. Retail loans now comprise 50 per cent of Stanchart's total loan portfolio.

Apart from the retail segment, the country's largest foreign bank is set to step up loans to small and medium enterprises, agri financing and micro-financing.

The bank is also increasing trade finance and other fee-based activities with rise in the country's external trade.

On Wednesday, the bank tied up with Oriental Bank of Commerce for agency trade services. This was the ninth such tie-up as Stanchart already has similar agreements with other Indian banks such as Punjab National Bank, Central Bank of India, Union Bank of India and Corporation Bank.

With these initiatives, the bank expects double digit growth in business in India. Stanchart has 80 branches in 32 cities in India servicing 2.4 million retail customers and over 800 top corporate clients.