A recent press report said that Standard Chartered India has reported a 39 per cent decline in profit before tax to $378 million in the half year ended June 2011, from $624 million in the corresponding year-ago period. The fall in profit was due to the lower income and higher provision.
In 2010, India was the largest contributor to the group’s profits, in the first half of 2011; it has fallen to the third position.
Mr. Neeraj Swaroop, Regional CEO, India and South Asia, said that the rising interest rates and the general slowdown in the macro environment has led to slowdown in projects, resulting in lower profits. He said that the immediate outlook is somewhat challenging.
Income from India operations declined to $893 million during the first half, from $1.101 billion last year.
Reports said that the charges on account of loan impairment increased to $72 million from $43 million. There was also a one-off specific impairment charge on corporate bonds to the tune of $50 million. The bank offers personal loan, home loan, business loans, vehicle loans etc.
Mr. Swaroop said that the bank has made higher provisions as a cautious measure and it was not seeing a rise in NPAs. But the provision is in anticipation of potential rise in NPAs given the soft environment going ahead.