Tightly Managed

Aug 31, 2012 (LBO) – Profits at Sri Lanka’s Standard Chartered Bank unit rose 20.9 percent to 1.52 billion rupees in the six months to June 2012 from a year earlier, helped by a surge in forex income, published accounts showed. Total performing loans rose only 5.9 percent to 46.8 billion rupees in the six months to December while deposits grew 7.6 percent to 66.7 billion rupees.

Net assets grew to 20.3 billion rupees from 18.0 billion rupees and gross assets grew to 95.2 billion rupees from 84.9 billion rupees during the six months to June 2012.

Interest income rose 29.4 percent to 3.38 billion rupees and interest expenses rose at a slower 23.8 percent to 1.095 billion rupees allowing the bank to grow net interest income 32 percent to 2.28 billion rupees.

Many other banks have seen steep rises in interest expenses which have squeezed interest margins as interest rates rose sharply over the several few months.

Fee income rose 36 percent to 1.79 billion rupees, with forex income surging 94 percent to 1.25 billion rupees.

Sri Lanka’s rupee was depreciated and was volatile in the first and second quarters of 2012 after the island’s dollar soft-peg came under pressure from sterilized foreign exchange sales o