After enjoying strong growth over
many years, the first half of the current fiscal year was
especially challenging for Standard Chartered (StanChart) in India,
but there are a number of mitigating factors.
The Reserve Bank of India increased
rates 11 times in 17 months to allay inflationary concerns; local
competition heightened margin pressure; product-specific rule
changes negatively impacted earnings.
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Despite the competitive landscape,
StanChart continued to invest. An increase in costs of 13% in the
first half partly reflected the bank’s ongoing investments in
Express Banking centres and online distribution in retail
banking.
Operating profit within the Indian
retail unit in the first half fell by 17% to $44m.
Elsewhere, retail banking
highlights in the first half included StanChart’s operations in
Hong Kong, with an operating profit of $270m, up 80%
year-on-year.
StanChart’s consumer unit in Africa
performed strongly with a profit up 21% at $58m. At group level,
StanChart’s Consumer Banking unit posted an operating profit of
$1.01bn for the six months to 31 June, up 58% year-on-year – the
first time the retail division had posted a seven figure dollar
profit in a six month period.
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By GlobalDataIncome from cards, personal loans and unsecured lending grew by
16%, to $1.15bn, driven by volumes that more than offset margin
compression.
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