The Indian operations of Standard Chartered Bank has registered a fall in net profit to Rs 66.69 crore for 1997-98 from Rs 70.65 crore in the previous year.
The net profit of the two years are not strictly comparable. This is because the net profit of 1996-97 included an extraordinary item of Rs 27 crore. If this item is excluded from the 1996-97 figure, profits have jumped in 1997-98. Hence, operationally, Standard Chartered has done better in 1997-98 than the previous year.
After adjusting for a prior item of Rs 27.4 crore, the net profit showed a growth of 54 per cent. This growth in net profit has been arrived at by taking into account the interest received on income tax refund not accounted for in 1995-96. The bank has also classified the amount of Rs 27 crore spent on technology upgradation and a Rs 10 crore loss on marking to market of investments in securities as `exceptional' items which has not been considered while computing profits.
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Stanchart has registered an increase in its net non-performing assets from 1.57 per cent to 2.42 per cent. Fresh NPAs have been created on account of poor performance in a few sectors such as automobile, said R Ganapathy, chief financial officer, Stanchart. The bank's capital adequacy ratio has also fallen marginally from 8.6 per cent to 8.5 per cent.
The bank's total income grew from Rs 692.8 crore to Rs 896.40 crore in 1997-98. Operating expenses also rose from RS 649.60 crore to Rs 829.70 crore.
The bank has registered a 15 per cent growth in deposits by Rs 616 crore, and a 24 per cent growth in advances by Rs 585 crore. Its tier I capital has also been augmented by Rs 64 crore during the year.
While the bank's investments have risen by 7 per cent, its net reserves was up by 27 per cent.
The bank's net interest rose from Rs 196 crore to Rs 229 crore while other income grew from Rs 144 crore to Rs 203 crore.
Martin Fish, chief executive, India, said that the bank had identified particular businesses it wanted to remain and grow in, and the process of consolidation would be carried through this year. Presenting the annual results of the bank, Ganapathy said the bank's performance had to viewed against a backdrop of industrial slowdown and intense competition with a pressure on margins.
For the current year, the bank planned to open a branch in Pune and had applied for more licences, said Fish. Stanchart was also developing a `PAN India hubbing activity' with offshore processing in Singapore. The bank's trades and payments would be centralised in Chennai, with Chennai and Calcutta being linked to the international service delivery technology platform introduced in Delhi.