The good times for the banking sector just keep on rolling. In its blockbuster results’ announcements, Standard Chartered Bank posted Rs. 5.4 Billion in Profits for financial year 2011, up from Rs3.6 billion in 201o, compared to the previous year.
The core reason for the jump in Standard Chartered’s profits was the sharp rise in the net interest margin – the difference between what the bank charges its borrowers and what it pays out to its depositors. The net interest margin for the bank rose by about 20% to Rs20.5 billion on the back of higher interest rates during 2011 as well as a sharp rise in the bank’s deposit base, which has allowed it to increase lending.
Standard chartered significantly reduce its bad debts (unrecoverable loans) which is now reduced to Rs 486 Million. Last year, Standard Chartered write off Rs. 1.6 Billion in bad loans.
“Provisions for non-performing loans have been lower across the banking sector this year,” Mr Aatif told EconomyAge, who’s working in Bank Alfalah. “In addition, remittances have been very high, which helps the banks with their fee income, raising their non-interest revenues.”
Despite the stellar growth in revenues, however, Standard Chartered has been able to keep the growth in its operational costs relatively low. Total operational costs rose hardly by 2%, less than the inflation during the past year.
Standard Chartered Share price stood at Rs. 10.30 per share at the time of this announcement with half a million shares change hands.
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