StanChart defies British bank gloom

EAGER investors sent Standard Chartered’s stock up 2.9 per cent yesterday after a half-year trading statement that promised double-digit growth in both income and pre-tax profits compared to the same period last year.

The bank said that while some regions like India and Africa had seen revenues dip, it was “more than offset by very strong performances” in eastern Asia.

Net margins were largely unchanged but the bank promised little increase in its cost-to-income ratio, saying that “managing expenses tightly” remains a priority. Along those lines, it reported that headcount is down slightly on last year.

Wholesale banking is to lead the revenue growth, but will suffer from higher costs, with consumer banking seeing the opposite – slower top line improvement but progress on shrinking the division’s cost base.

A slew of positive analyst comments drove the bank’s shares up throughout the day to a closing price of 1,584.5p.

Killik & Co’s Nick Sotiropoulos said of the bank: “It is at a significant premium to the other UK-listed banks and appears fairly valued.”

BNP Paribas analyst L. Sin Fai Lam also said that the bank deserves a premium: “Once again, Standard Chartered is proving to be one of the more resilient banks in the UK, with stronger visibility on earnings and lower downgrade risk.”