India emerged as the most profitable market for Standard Chartered Bank globally, as the British lender’s pre-tax profit in this country expanded 13 per cent from a year ago to $1.2 billion in 2010.
“Income for the first time crossed $2 billion. Profit for the second time in a row crossed $1 billion. It is the first full year (when) India has emerged as the largest profit geography for the group,” said Neeraj Swaroop, the bank’s regional CEO for India and South Asia.
“Broadly, I will attribute it to the diversified nature of our banking. We have several business engines both in consumer and wholesale banking. It is not exceptional. It is in line with performance we have delivered in the past,” he said. On a post-tax basis, India was the second-most profitable destination for Standard Chartered after Hong Kong. This was because tax rates in India are higher than Hong Kong.
In India, the bank’s net interest margin during the year narrowed 40 basis points to 3.4 per cent as competition intensified in the local market. “We expect our margins to follow a logical path because there is a certain cost of doing business. For the next six to 12 months, we believe margins should remain flat,” Swaroop said. The bank’s net interest margin globally was 2.2 per cent. The bank did not open any new branch in India last year, but added 80 ATMs. It has a network of 94 branches, which is about one-third of foreign banks’ branches in the country.
