Standard Chartered PLC Tuesday announced a 9 percent rise in both income and profits to $9.51 billion and $3.95 billion, respectively, for the first half of 2012.
This represents a 10th consecutive record first half of profit growth, said the group in a statement issued here on Tuesday. The Group’s balance sheet is in excellent shape and we continue to be well diversified, strongly capitalised and primarily deposit funded. We have already met Basel III capital requirements with a Core Tier 1 of 11.6 per cent and we have very strong advances to deposits ratio of 77.6 per cent. We continue to benefit from being the only major international bank to be upgraded by all three rating agencies since the onset of the financial crisis.
Asset quality is good, although we remain watchful given the strongly challenged macro-economic environment. We have limited refinancing requirements over the next few years.
LOAN IMPAIRMENT: Group level loan impairment remains at very low levels albeit up by 42 per cent on the first half and 18 per cent on the second half of 2011. We have seen some increase in loan impairments in both businesses, but from very low levels, and we remain very comfortable with the shape and quality of our loan book. We remain disciplined and proactive in our approach to risk management. In the Consumer Bank, 82 per cent of the lending book is either fully or partially secured. We are comfortable with the maturity profile on our Wholesale Banking loan book with over 63 per cent under one year.
CONSUMER BANKING: The Consumer Banking transformation programme continues to make good progress and we are investing in the business in order to grow both our customer base and customer service capabilities.
Income grew 5 per cent year on year to US$3.5 billion. Deposit income is up strongly, 14 per cent year on year, with income on credit cards and personal loans showing excellent momentum up 13 per cent year on year as we continue to grow balances, up 7 per cent since the year end. SME continues to perform well with 7 per cent income growth year on year driven by Lending, Trade and Cash Management.
Within Consumer Banking, a 3 per cent slowdown in Wealth Management income, the one-off expense recoveries of US$86 million last year and the increase in loan impairment of 42 percent has resulted in an operating profit reduction of 11 per cent on the first half of 2011, as previously guided.
WHOLESALE BANKING: Wholesale Banking has delivered another strong performance, reflecting the resilience of the business model, the continued business activity of our client base and underlying growth within our footprint. Income is up 10 per cent on the first half of 2011, with client income contributing 80 per cent of total Wholesale Banking income. Transaction Banking, the heart of the Wholesale bank, has had an excellent first half, with 19 per cent income growth: Trade, income was up 25 per cent and Cash Management income saw strong growth of 13 per cent year on year underpinned both by growth in average balances and an improvement in margins. Corporate Finance income of US$991 million was up 9 per cent in the first half of 2011. Wholesale Banking continues the year well with very strong transaction pipelines excellent momentum across many of its businesses.
Standard Chartered Group Chief Executive Peter Sands, said: ”These results represent a very positive start to the year. Our record of consistent delivery is testament to the resilience of the Bank’s business model, and underscores the sheer diversity of the income engines we have. These results are simply our tenth consecutive first half of record profits.”
