Sands does it again despite hard times

IT’S almost impossible to believe. Despite the worst recession in a generation and the near-implosion of the global banking sector, Standard Chartered yesterday celebrated a seventh consecutive year of growth. Shrugging off the contraction in worldwide GDP, the Asia-focused bank booked record profits of $5.1bn (£3.4bn) thanks to strong performances from Hong Kong and India.

Unlike HSBC, which also books the vast majority of profits in Asia, it has no exposure to mature western markets, meaning the deleveraging that has taken place in the US and Europe has had little impact. Once decried as a boring bank, Standard Chartered now stands as one of the only big-hitting players not to accept government support; it is surely glad that it didn’t expose itself to the subprime mortgage market as HSBC did when it acquired Household, a disastrous move that still drags on profits.

The only blot on the horizon is more red tape. Chief executive Peter Sands yesterday warned that “the regulatory rules of the game are in a state of total flux”. When all around it went to the state cap-in-hand, Standard Chartered decided to go it alone; that its wholesale banking division could suffer from knee-jerk regulatory reform is deeply unfair.

Elsewhere, there were only positives. Impairments were a more-than manageable $2.1bn, or 0.8 per cent of the total loan book, a rise of just $400m on a year earlier. It also managed to reduce costs by three per cent in its consumer arm, meaning overall costs rose by just four per cent – not bad for a bank growing this quickly.

In 2010, things will only improve. Asian GDP excluding Japan is forecast to grow by six per cent, meaning it will outperform more geographically diverse rivals, while weaker sterling will flatter profits. What more could you ask for?