Asia slowdown hurts earnings at StanChart

Tim Wallace
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BRITISH bank Standard Chartered saw profits fall in the first half of the year, yesterday announcing a $1bn (£652m) writedown on Korean operations and warnings of the possible impact of China’s economic slowdown.

The emerging markets-focused lender saw pre-tax profits dip 15.5 per cent on the year, falling from $3.9bn to $3.3bn.

In Korea the bank took a $1bn goodwill impairment charge, citing rising bad loans and tougher regulation of the sector in the country. Industry-wide return on equity has fallen from 18 per cent to five per cent in the eight years since the group entered the nation.

In Singapore profits fell 12 per cent, while Indonesia and Malaysia also saw declines.

But excluding the Korean woes the bank beat expectations, sending shares up 2.85 per cent on the day.

Profits in Hong Kong increased 19 per cent to just over $1bn in Hong Kong, Indian consumer bank operating profits rose 48 per cent to $71m and wholesale operating profits increased 44.1 per cent to $379m, and Africa’s increased 3.8 per cent to $81m in consumer banking and 11.7 per cent to $276m in wholesale.

Corporate finance operating incomes rose 24.9 per cent to $1.2bn, and global markets overall improved 6.1 per cent to $3.9bn.

Return on equity fell to 13.3 per cent from 13.8 per cent a year earlier and the core tier one capital ratio slid from 11.6 per cent to 11.4 per cent.