Standard Chartered releases IMS for 3rd quarter
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.