Stan­dard Char­tered re­leases IMS for 3rd quar­ter

The Pak Banker - - Front Page -


Stan­dard Char­tered to­day re­leases its In­terim Man­age­ment State­ment (IMS) for the third quar­ter of 2012. Peter Sands, Group Chief Ex­ec­u­tive, com­mented, "Stan­dard Char­tered has con­tin­ued to per­form strongly in the third quar­ter of 2012. Al­though the en­vi­ron­ment re­mains tur­bu­lent, we are in the right mar­kets and continue to see good mo­men­tum across our busi­nesses and ge­ogra­phies. Lend­ing and de­posits have both in­creased over the last three months as we continue to sup­port our cus­tomers and clients.

We man­age the Group con­ser­va­tively with costs con­trolled tightly and risk well man­aged. Our bal­ance sheet phi­los­o­phy re­mains a source of com­pet­i­tive ad­van­tage with a fo­cus on diver­sity, high lev­els of liq­uid­ity and a strong cap­i­tal po­si­tion." The fol­low­ing com­men­tary ex­cludes the im­pact of the UK bank levy but in­cludes a pay­ment of US$340 mil­lion made to the New York State Depart­ment of Fi­nan­cial Ser­vices ("NY DFS"). The Group con­tin­ues to en­gage with the other US agen­cies on their re­view of the Group's his­tor­i­cal US sanc­tions com­pli­ance. 'Year to date' refers to the nine months ended 30 Septem­ber 2012 and com­par­isons are made to the same nine month pe­riod in 2011 un­less oth­er­wise stated.

Whilst the global econ­omy is slow­ing, and within that the Asian economies are now show­ing signs of lower growth, the Group has de­liv­ered a strong third quar­ter per­for­mance with good in­come growth, busi­ness as usual ex­penses well con­trolled and no ma­te­rial change to the loan im­pair­ment trends. Over­all, a strong per­for­mance for the quar­ter.

Year to date, in­come grew at a high sin­gle digit rate, main­tain­ing the tra­jec­tory seen in the first half of 2012. In­come has con­tin­ued to be im­pacted by the strength of the USD against Asian cur­ren­cies, with year to date in­come grow­ing at a dou­ble digit rate on a con- stant cur­rency ba­sis.

Our in­come per­for­mance re­mains broad based across a wide spread of ge­ogra­phies, client seg­ments and prod­ucts. Hong Kong, China, In­done­sia and the Americas, UK and Europe re­gion have de­liv­ered strong per­for­mances and more than off­set con­tin­ued cur­rency weak­ness im­pact­ing In­dia's growth, a slow­down in Sin­ga­pore's Whole­sale Bank­ing busi­ness and a muted Con­sumer Bank­ing per­for­mance in Korea.

Costs re­main well con­trolled with broadly neu­tral cost in­come jaws, even af­ter in­clud­ing the set­tle­ment with the NY DFS, plus a legacy le­gal pro­vi­sion of a com­mer­cial na­ture, the cost of head­count in­creases which were in line with ex­pec­ta­tions and the con­tin­ued in­vest­ments into our branch net­work in­clud­ing in China and Africa.

Loan im­pair­ment for the Group was be­low the first half run rate by some high tens of mil­lions of dol­lars. How­ever we re­main cau­tious given the slow­down in the macroe­co­nomic en­vi­ron­ment. As a re­sult of the above, the Group's oper­at­ing profit for the year to date has grown at a mid sin­gle digit rate, or at a dou­ble digit rate ex­clud­ing the NY DFS set­tle­ment.

The bal­ance sheet is well di­ver­si­fied and con­ser­va­tive and re­mains a source of com­pet­i­tive ad­van­tage. We continue to see growth on both sides of the bal­ance sheet with in­flows of de­posits and con­tin­ued dis­ci­plined loan growth high­light­ing the strength of our fran­chise. The ad­vances to de­posit ra­tio re­mains strong and was be­low 80 per cent at the end of the third quar­ter.

Con­sumer Bank­ing has con­tin­ued to per­form in line with the first half with in­come grow­ing at a mid sin­gle digit rate year to date. In­come re­mains broadly spread with dou­ble digit growth in China, in In­done­sia and across Africa. From a prod­uct per­spec­tive, De­posits and Credit Cards and Per­sonal Loans have grown in­come at dou­ble digit rates year to date. Across these busi­nesses, vol­umes have con­tin­ued to grow, more than com­pen­sat­ing for some mar­gin com­pres­sion.

Mort­gage in­come ac­cel­er­ated from the first half run rate, al­though it re­mains be­low the 2011 year to date in­come level. Balances have grown in the third quar­ter and mar­gins have re­mained broadly sta­ble. Hong Kong and Korea showed strong dou­ble digit growth in Mort­gage in­come over the first half run rate.

The Group has demon­strated the un­der­ly­ing strength of the fran­chise in the past quar­ter with con­tin­ued good in­come and bal­ance sheet mo­men­tum. We re­tain a firm grip on the man­age­ment levers of cost, risk and in­vest­ment and re­main in ex­cel­lent shape. We are well po­si­tioned in the world's growth mar­kets and we look for­ward to pro­vid­ing a fur­ther up­date in early De­cem­ber in the pre­close trad­ing state­ment.

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