Asian focus pays off again for Standard Chartered

STRIKES in Korea and a slowdown in India failed to stop Standard Chartered’s march to a record profit for the ninth consecutive year.

The bank, which specialises in emerging markets, posted an 11pc increase in profits to £4.25bn.

Like HBSC it has tapped into rapid growth in Asia, Africa and the Middle East. This has cushioned it from economic problems in the eurozone.

It has also avoided investing in sovereign debt issued by trouble-spots Greece, Ireland, Italy, Portugal and Spain.

Standard said its ‘star’ performer was Hong Kong which made record profits – up 41pc to £941m. Profits were also up 40pc in Singapore, hitting $1bn (£627m) for the first time.

The bank said it had benefited from ‘disarray’ in Western banks, picking up business from companies such as Diageo and Unilever wanting to expand their Asian operations, as well as helping firms from emerging economies expand in the West.

But the Indian government’s attempts to curb inflation with 13 interest rate hikes in two years has slowed down the economy and contributed to a 33pc fall in profits last year to £504m. And a ten-week strike from its Korean workforce culminated in Standard having to pay around £125m for an early retirement programme. Profits fell 56pc to £108m.

Rising wages in developing markets also proved a headache, contributing to a 10pc increase in costs.

Chief executive Peter Sands revealed he will receive a £2.2m pay- out on top of his £1.1m salary. This does not include long-term share awards to be announced next month.

In a thinly-veiled swipe at some of his rivals he said Standard Chartered did ‘not reward failure or short-term risk taking’.

He also pointed out dividends paid to shareholders exceeded the bonus pool, which remained flat at £800m, despite higher profits. In total £1.13bn was paid in dividends.

Sands became the first major UK bank boss to voice fears over the European Central Bank’s second auction of cheap funds.

He said: ‘I have concerns about the unprecedented degree of central bank intervention…i’m not quite clear what the exit strategy is and what the long-term consequences are.’

Sands said he had similar concerns about the Bank of England’s quantitative easing programme, which has pumped £325bn into the UK economy.