The Hong Kong and Shanghai Banking Corporation in India has reported a 32 per cent rise in net profit (after extraordinary expenses) to Rs 197.8 crore (Rs 1.98 billion) for the fiscal ended March 31, 2004, compared to Rs 150.3 crore (Rs 1.50 billion) in the previous financial year.

The net profit before extraordinary expenses was up by 109 per cent at Rs 313.4 crore (Rs 3.13 billion) in FY04 [Rs 150.3 crore (Rs 1.50 billion) in FY03], HSBC said in a release on Monday.

The net operating income rose by 29 per cent to Rs 1,396.6 crore (Rs 13.97 billion).

HSBC Group general manager and CEO for the bank in India, Niall Booker, said: "The fiscal was a period of further growth and achievement for HSBC in India. The strong performance was driven mainly by business opportunities arising from strong growth in the Indian economy as well as from our increased emphasis on marketing and sales activities."

When asked if profits would be retained in India, HSBC spokesperson said: "The capital adequacy ratio is comfortable at around 14 per cent and funds are available from the group as and when required."
 
Deposits in FY04 were up 27 per cent to Rs 16,269.9 crore (Rs 162.69 billion) while advances increased 17 per cent to Rs 9,628.1 crore (Rs 96.28 billion).

Total assets were up 21 per cent to Rs 25,356.9 crore (Rs 253.57 billion).

The extraordinary item was the one-off charge of Rs 196 crore (Rs 1.96 billion) for the voluntary separation scheme, which was offered to the staff at HSBC's commercial banking operations in India last year with 514 employees opting for the same.

HSBC's home loan portfolio doubled to Rs 2,000 crore (Rs 20 billion) as a result of concerted sales and marketing efforts.

The net non-performing assets declined to 0.70 per cent of net advances from 1.03 per cent in 2002-2003. During the financial year, personal financial services accounted for 36 per cent of total advances, against a 31 per cent contribution in the previous period.

Provisions and contingencies increased to Rs 200.5 crore (Rs 2 billion) while the capital adequacy ratio declined to 14.54 per cent.

In FY04, HSBC expanded its presence to 35 branches in India with new branches in Thane, Powai, New Delhi and Kochi.

The foreign bank plans to establish new branches in Indore and Vadodara later this year and has recently received the Reserve Bank of India's approval to set up branches in Nagpur, Pune and Delhi as well.