StanChart profit up 17pc

City A.M. Reporter
Asia-focussed Standard Chartered Bank reported a market-beating 17 per cent rise in first-half pretax profit on Wednesday, helped by strong growth in emerging markets and keeping it on track for another year of record profits.

The London-headquartered bank reported a pretax profit of $3.636bn (£2.233bn), up from $3.12bn a year earlier.

"We are maintaining our tight grip on expenses in both businesses while beginning to accelerate investment to underpin growth in 2012," chief executive Peter Sands said in a statement posted on the Hong Kong stock exchange. "Momentum is very good and we are continuing to take market share across a number of products and geographies."

Cost growth rising faster than income growth, known as "negative jaws," has dogged the bank in the past year as it battles rivals such as HSBC to keep and retain staff in fast-growing Asian markets.

This year, StanChart said it expected to keep costs and income growth roughly in line, known as "neutral jaws."

To keep costs under control, lenders have been looking to eliminate jobs, with HSBC saying it will eliminate a total of 30,000 jobs by 2013 and Credit Suisse saying it will cut 2,000 jobs.

Standard Chartered did not say how many jobs it would cut, but it previously said it had cut 800 staff in the first quarter and expected to add about 1,000 staff net this year to its about 85,000 employees.

Profit from India, its biggest market, fell 39 per cent and the bank said the immediate outlook for the country remained challenging as the slowdown there had come faster and deeper than expected.

Costs were too high in South Korea and its balance sheet there inefficient, StanChart said, where it has had to grapple with strikes over changes to its pay structure.

Its London-listed shares are down about 11 percent so far this year, valuing the bank at about $60bn. It is trading at about 11 times earnings, roughly in line with crosstown rival HSBC.