Citigroup Inc. (NYSE:C), HSBC Holdings plc (NYSE:HBC) (LON:HSBA) (HKG:0005) and Deutsche Bank AG (NYSE:DB) (ETR:DBK) (FRA:DBK) have posted strong set of numbers in Asia’s third-largest economy for the fiscal year 2012, amid robust growth in consumer business, and improving asset quality.
Citigroup India on Tuesday reported a 35 percent rise in profit after tax to 19.22 billion Indian rupees ($352 million) for the financial year 2011-12, from 14.24 billion rupees in FY11. Total assets increased 15 percent to 1.28 trillion rupees as of 31 March, from 1.1 trillion rupees in the previous fiscal, driven by growth in mortgage lending and commercial banking segment. Deposits grew 14 percent to 646.98 billion rupees, of which current and savings account accounted for 55 percent. Non-performing assets as a percentage of overall loans fell to 0.9 percent from 1.2 percent in the previous year, and the bank managed to maintain a healthy capital adequacy ratio of 16.03 percent. Citi made its debut in India in 1902, and has investments of around $4 billion, making it the single largest foreign director investor in the country’s financial space.
HSBC India last week reported a 30 percent jump in full year net profit to 19.88 billion rupees ($364 million), helped by an increase in advances and deposits, and a reduction in bad loans. Deposits of the bank rose 13 percent to 614.23 billion rupees for the year ended March 31, 2012, while advances grew at a healthy 30 percent to 355.12 billion rupees, up from 274.01 billion rupees in the year ago period. Asset quality improved, with net non-performing assets ratio declining to 0.62 percent from 0.91 percent a year ago. The capital adequacy ratio however fell to 16.04 percent from 18.03 percent a year ago. HSBC is India’s second largest foreign bank by assets and branch network, and employees close to 30,000 people.
Deutsche Bank India last month said net profit jumped 31 percent to 8.23 billion rupees ($151 million) for the year ended March 31, 2012, from 6.30 billion rupees a year earlier, largely due to a turnaround in its retail banking operations. The German lender’s net interest margin expanded to 5.7 per cent, while non-performing asset ratio stood at 0.09 per cent. Deutsche Bank AG recently infused 4.55 billion rupees into its Indian banking operations, and is currently in the middle of an expansion of its retail branch network in the country.
The results are particularly impressive, because they have come at a time when most Indian banks are struggling to maintain growth due to a high interest rates regime, and rising non performing assets. Interestingly, despite the foreign lenders posting healthy growth, they account for only 7 percent of the assets of the Indian banking system.
All eyes will now be on Standard Chartered PLC (LON:STAN), the largest foreign bank in the country, which is scheduled to report its annual numbers later this month.