Standard Chartered posts record profits

August 4, 2009

, LONDON, Aug 4 – Emerging markets bank Standard Chartered posted record first-half profits on Tuesday and launched plans to raise extra cash from shareholders to fund ambitious growth in Asia, Africa and the Middle East.

Pre-tax profits surged 9.7 percent to a record 2.838 billion dollars (1.971 billion euros) in the six months to the end of June, compared with 2.586 billion dollars in the same part of last year.

Net profits advanced 5.5 percent to 1.883 billion dollars, the British-based group said, adding that it would launch a 1.0-billion-pound (1.17-billion-euro, 1.69-billion-dollar) rights issue.

"We have achieved record results through our disciplined management approach and the diversity of our business and markets in Asia, Africa and the Middle East," chairman John Peace said in the earnings release.

"I believe that the bank has a very clear and focused strategy and we have no intention of deviating from this.

"Our strong levels of capital and liquidity have given us a competitive advantage and our decision to raise further capital today will reinforce this and support our future growth."

The news comes one day after British banking peers Barclays and HSBC posted combined first-half net profits of 6.55 billion dollars but also revealed rocketing bad debts in the first six months of the year.

All three banks have avoided state control unlike rivals which fell victim to the global financial crisis and subsequent international lending squeeze.

Lloyds Banking Group and Royal Bank of Scotland — which are both now majority state-owned after receiving enormous government bailouts — will post their first-half numbers on Wednesday and Friday respectively.

Northern Rock bank, nationalised last year after it was also ravaged by the credit crunch, admitted Tuesday that pre-tax losses deepened in the first half as bad debts tripled amid a worsening recession in Britain.

Standard Chartered said it remained cautious about the global outlook amid "testing times" for the banking industry.

"These remain testing times for banks and we remain cautious about the near term global economic outlook," Peace added.

The bank also revealed that revenues soared 13.9 percent to 7.96 billion dollars in the first half — but its bad debts more than doubled to 1.088 billion dollars.

"The group has continued to deliver record profits in the face of a difficult environment… We expect the take-up of the placing to be strong," said NCB equities analyst Simon Willis.

Meanwhile, recent press reports suggested that Standard Chartered was mulling the purchase of some Asian assets from Royal Bank of Scotland.

RBS, which is now 70-percent owned by the state, said Tuesday that it will sell part of its Asian operations to Australia and New Zealand Banking Group for 418 million dollars (294 million euros).

The embattled group added that it was in "advanced" talks over the sale of its remaining Asian assets.

However, an RBS spokesman declined to comment on reports that Standard Chartered was in the running.

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