Standard Chartered Bank, which regained its position as the most profitable foreign lender in India in 2012-13, has seen a sharp rise in non-performing loans that could stress its India earnings in the current financial year. According to bank sources, a couple of large corporate credit accounts slipped into the non-performing category, resulting in an increase in bad loans. One of the accounts is from the gems and jewellery sector; the other is from telecom. These sources also said the spike is primarily on account of two large accounts. Adequate provisions have been made against these loans and the bank is also making efforts to recover the money that was lent. The bank’s gross bad loan ratio in India continues to remain close to 6%, one of the highest among foreign banks operating in the country. The bank’s India branches reported a gross bad loan ratio of 5.98% and net non-performing asset ratio of 1.63% at the end of March 2013. The fund and non-fund based loan exposure to the gems and jewellery segment was Rs 3,542 crore, while to the telecom industry it was Rs 4,139 crore. Gross advances (fund- and non-fund based) at the end of 2012-13 were at Rs 96,394 crore. The bank had turned cautious in offering fresh loans in the current uncertain economic environment that prevented significant deterioration in credit quality of the bank’s India branches.
