Standard Chartered, the UK’s second-largest bank by market value, said first-half profit rose 19 percent as record earnings in Hong Kong helped make up for a decline in India.
Net income climbed to $2.57bn for the six months ended June 30 from $2.15bn a year earlier, according to a statement to the Hong Kong stock exchange today.
Standard Chartered, which earns most of its profit in Asia, is seeking its eighth successive year of record net income. Finance director Richard Meddings in June forecast the bank would hire a net 1,000 people this year, while British rivals including Barclays and HSBC Holdings have announced plans to cut jobs as revenue in Europe and the US slows.
“This is a bank that is very steady and predictable and I think that will remain the case in the second half,” John Wadle, head of regional banks at Mirae Asset Securities (HK), said by phone. “Their ability to take advantage in a volatile environment on the revenue side will be critical. Equally, people will look to see if their corporate-finance business, which was very strong in the first half, can be sustained.”
Shares of Standard Chartered rose 1.4 percent to 1,575.5 pence at 8:15 am in London trading, valuing the bank at £7.5bn ($61bn). The shares have declined eight percent this year.
Standard Chartered hired about 7,000 people last year and in June said costs would swell in line with revenue as the bank and its rivals face rising wages in their fast-growing Asian markets. HSBC this week said it would cut about 30,000 staff worldwide, or 10 percent of its workforce, by the end of 2013, while Barclays said it would eliminate 3,000 jobs this year. HSBC said it plans to hire 3,000 to 4,000 people a year in emerging markets.
“Given the markets we are in, and the momentum of our businesses, we expect to deliver double-digit income growth in 2011 and beyond,” Standard Chartered chief executive officer Peter Sands, 49, said in the statement. “Costs remain tightly managed.”
India remains “challenging” after the Reserve Bank of India raised rates 11 times in the past 17 months and competition increased from local and foreign banks, eroding margins, the bank said. Pretax profit in the country declined 39 percent to $378m.
Pretax profit in Hong Kong rose by a record 55 percent to $790m, lifted by consumer and corporate banking. Consumer banking profit in Singapore increased to $190m from $146m.
The company said its cost-to-income ratio shrank to 54 percent for the first half from 54.3 percent a year earlier.
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