Profits up 17 percent at Standard Chartered
Updated: 2009-03-04 07:22
By Joey Kwok(HK Edition)
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HONG KONG: Standard Chartered, the second largest bank in the UK by market value, yesterday reported a 17 percent surge in its net profit for 2008. The increase extends from revenues from corporate lending.
The bank, which makes two-thirds of its revenue from banking in Asia, said net earnings for the twelve months ended Dec 31 last year amounted to HK$25.7 billion, while pretax profit also jumped 19 percent to HK$37.4 billion.
Net interest income of Standard Chartered soared 18 percent to $1.12 billion, while net fees and commissions income also increased 11 percent to $2.94 billion.
However, volatile stock markets around the world dampened investor sentiment and significantly dragged on the bank's wealth management offerings, such as unit trusts, insurance and structured investment products.
Standard Chartered's loan impairments also surged 74 percent to $1.32 billion, as the credit environment became increasingly challenging for its corporate and retail customers in the second half of 2008.
Weakened wealth management and increased loan impairments in the latter half of the year also weighted down the bank's operations in Hong Kong. The territory's pretax profits dropped 15 percent to $1.01 billion.
Benjamin Hung, Chief Executive Officer of Standard Chartered Bank in Hong Kong, said the territory remains the biggest profit contributor at the bank and is the only market contributing in excess of $1 billion in profits.
"Standard Chartered Bank in Hong Kong remains strongly capitalized and highly liquid, with a 31 percent increase in total customer deposits," Hung said in the bank's press conference in Hong Kong yesterday.
"We are confident that Hong Kong will be the first economy to rebound," Hung added.
The UK lender, meanwhile, said it remains confident about its operations in emerging markets and also expects Asia to recover more quickly from the financial turmoil than economies in the West.
"Asia has been learning from the previous financial crisis in the 90's," said Jaspal Bindra, Chief Executive Officer of Standard Chartered Bank in Asia, "We are not in a panic in the Asian market."
Having raised $2.68 billion in a rights issue in November last year, the core tier 1 capital ratio of Standard Chartered jumped to 7.6 percent by the end of December from 6.6 percent in the first half, while the tier 1 capital ratio also advanced to 10.1 percent from 8.5 percent.
Bindra said the bank will continue its sustainable growth, while it will also be open to look for any acquisitions opportunities. "We will apply very strictly," he added.
Due the impact of the global financial crisis, all senior managements of the bank have not received any pay rises, while the directors' bonuses were also reduced by 10 to 25 percent.
(HK Edition 03/04/2009 page16)