Uttar Pradesh, India (PressExposure) July 03, 2009 -- The Hong Kong and Shanghai Banking Corporation has reported a high profit increase this year compared to the last financial year. The profits have increased by 8 % that comes to Rs. 1291 crore compared to Rs. 1192 crore last year.
The high growth in income is very encouraging and proves the success of the company's marketing strategies and popularity of the product. The high interest expenses, rise in delinquencies and impairments on the consumer side especially in credit cards and personal loans has caused problems for the organization.
Due to these problems the organization has become very cautious in the mid-market segment and has also temporarily stopped its small ticket personal loan business.
The interest income has risen by a whopping 27% which is a profit of Rs. 6326.9 crore. Hand in hand the interest expenses have also increased at a much faster pace. It grew by 32 % and has come to Rs. 2661 crore. Other Incomes grew by 27.5 % to Rs. 2699 crore and operating expenses remained the same by Rs. 2194 crore.
Provisions as well as contingencies have increased by 65.2% to Rs. 2,879.4 crore. Provisions towards NPAs were also affected with an increase of 1.5 times to Rs. 1,654.2 crore from the previous financial year of Rs. 651.5 crore. Net NPAs of the bank also rose to 1.4% from the previous 0.6% . On a segmental basis, the part of the business that dealt directly with the consumers, the retail banking section has made severe losses of Rs. 511 crore as compared to the losses of Rs. 165.9 crore in the previous financial year.
The organization's medium to long term plan is to increase its customer base and make its financial products popular in the common market. It plans to sell various products to its customers so that most customer's have at least more than one product of the same organization.