A recent press report said that India was a profitable market for foreign banks in the last year. Reports said Citibank India has announced a 78 per cent increase in profit after tax to Rs 1,859 crore for 2010-11 from Rs 1,046 crore in 2009-10.
Standard Chartered India had reported a profit before tax of Rs 5,400 crore for 2010, which was 13 per cent higher than the previous year. The Indian arm of HSBC posted profit before tax of approximately Rs 3,060 crore, up 82 per cent from a year ago. And Deutsche Bank India posted a profit after tax of Rs 630 crore for the year ended March 31, 2011, an increase of 41 per cent. Analysts have said that a major share of the foreign banks’ incomes could be because of treasury or trading and advisory activities for mergers and acquisition deals.
Mr. Monish Shah, Director, Deloitte, said that foreign banks are aiming at a broader audience than their traditional segments. Analysts feel that income of foreign banks operating in India would be more on account of non-fund income especially from M&A deals and less on account of core banking. He added saying that income from lending (home loan, business loans, personal loan etc.) is usually not a large part of their business.