India became the largest contributor to Standard Chartered Bank Plc's yearly profit for the first time as the country's rapid economic growth helped accelerate demand for loans and increase fee income.

The UK-based banking group's profit rose 19% to $6.12 billion (Rs.27,500 crore) in 2010, with India contributing $1.19 billion, higher than Hong Kong's $1.10 billion profit.

India has been a high-growth market for the bank with a 38% compounded annual growth rate over the past five years.

Income from India rose nearly 12% to $2.02 billion in 2010, with consumer banking contributing $493 million, up from $444 million in 2009.

Of the total income from India, 53% came from interest income and 47% from fees for its various services, the bank said.

"Advances grew 28%, including 33% in the consumer business, and deposits grew 27%," said Anurag Adlakha, chief financial officer, India and South Asia, for Standard Chartered. The bank's balance sheet crossed $20 billion, up 20% from 2009.

Profits were up despite lower margins in 2010. Net interest margins, or the difference between the bank's lending rate and the rate at which it borrows, fell to 3.80% from 3.40% in 2009 mainly because of "increased competition", Swaroop said.

The fact that the bank had to set aside less money for bad loans added to the profit.

Banks in India faced an increase in defaults on loans, especially relating to credit cards and personal loans, due to job losses during the slowdown.

Swaroop said the bank now sees the credit card business in a new light because of the improved economy.Standard Chartered had 1.4 billion credit cards in 2008 and has not added to that since.

Standard Chartered is the largest foreign bank in India with 94 branches, which is one-third of all foreign bank branches in the country.