HONG KONG - Standard Chartered beat forecasts with a 9 per cent rise in half-year profits, helped by its strength in areas such as trade finance where some peers are scaling back activity, and setting up the bank for a 10th consecutive year of record earnings.
The London-headquartered, Asia-focused bank, under Chief Executive Peter Sands, rode on Asia's rise for a large part of the past decade, allowing it to continue hiring and posting earnings growth when much of the industry was shrinking.
"The second quarter was very tough for everybody, so for them to achieve such growth is very decent," said Dominic Chan, an analyst at BNP Paribas in Hong Kong.
StanChart said its pretax profit in the six months to the end of June was US$3.95 billion (S$4.9 billion), up from a restated US$3.64 billion a year ago.
That was above the average forecast of US$3.7 billion from six analysts surveyed by Thomson Reuters I/B/E/S and in line with the company's guidance in June.
Sands said recession and problems in western economies had slowed growth in Asia, but he was confident growth in the region would continue, albeit with "some bumps in the road".
"We have had a strong July, but we are watchful of the significant and growing challenges in the external world, and we are managing risk tightly," Sands said.
By 0720 GMT Standard Chartered's London shares were up 2.4 per cent at 14.99 pounds, outperforming a 0.6 per cent rise by the European banking index.
NO LIBOR INVESTIGATION
Sands said he was not aware of any investigation into the bank as part of worldwide regulators' probe into Libor and Euribor interest rate rigging. The bank had not suspended any staff in relation to the issue.
Rival Barclays was last month fined US$453 million for manipulating interest rates, and more than a dozen other banks are being investigated as the probe widens.
"We have our risk radar turned on full given the turbulence in the external environment," Sands told reporters on a conference call.
StanChart's January-June pretax profit growth is the slowest in a decade, hit by a slowdown in the consumer bank and what it described as "economic and political paralysis" in one of its biggest markets, India.
Even with the slowing growth, StanChart has outperformed most of its peers. Bigger rival HSBC, which is in the midst of a major cost-cutting and business overhaul programme, reported on Monday a 3 per cent fall in underlying profit, which excludes certain one-off items.
The bank's income also grew 9 per cent in the half-year, just short of its target of 10 per cent, but it said it was confident of achieving that for the full-year and maintaining cost growth to largely match income growth.
The wholesale bank, which includes its investment banking operations, was StanChart's star performer, reporting a 16 per cent rise in pretax earnings.
This, in turn, pushed up earnings at the two Asian financial hubs of Singapore and Hong Kong. Pretax earnings in the bank's Hong Kong operations rose 10 per cent, while Singapore's pretax earnings rose 17 per cent.
In China and India, the bank expects to reach 100 branches in each country by early 2013, up from about 90 branches, StanChart said.