Operating profits for the Indian arm of Standard Chartered Plc rose 3 percent in calendar year 2013 to USD 697 million, or Rs 4,321 crore (1 USD = Rs 62) but gross non-performing assets for the bank jumped sharply to 7.9 percent.
The UK-based bank, which derives 90 percent of its revenues from Asia, Middle East and Africa, reported an overall 7 percent fall in its profit – the first decline in a decade -- as a sharp slowdown in emerging markets weighed.
Bad loans for Standard Chartered jumped 40 percent in Hong Kong while it had to take a USD 1 billion impairment charge in Korea.
The jump in gross NPA for the Indian arm is sharp – the bank’s NPAs stood at 6.7 percent in 2012 and 3 percent in 2011. The bank is one of India’s largest foreign lenders and operates 99 branches in the country.
But Standard Chartered’s foreign peers in India such as HSBC and Citibank have fared better on the asset quality front, with FY2013 NPAs standing at 1.76 percent and 2.58 percent. Gross NPAs for private Indian banks such as HDFC Bank and Axis Bank stood at 1 percent and 1.25 percent in the December quarter.
Standard Chartered’s NPA problem stemmed from loans to two large clients going bad -- in the telecom and gems and jewelry sector – an official told Mint on the condition of anonymity.
India profits were driven by a 26 percent gain for Standard Chartered’s consumer banking division at USD 120 million (Rs 744 crore) while the wholesale, or corporate, banking division’s profits fell 1 percent to Rs 3,577 crore.
Loan impairments stood at USD 195 million (Rs 1209 crore). The bank also took a USD 105 million (Rs 651 crore) loss on investments by marking to market its portfolio of bond and private-equity investments.
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