StanChart slumps despite record half

Steve Dinneen
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STANDARD Chartered saw its share price tumble yesterday despite posting its tenth successive half of record profits.

The hike in income failed to match some analyst forecasts and sent the shares down closing 3.1 per cent lower at 1,804p, with analysts pointing to hedge funds shifting to other banks.

Standard Chartered reported first half profit of $3.12bn (£1.96bn), 10 per cent up year on year and 35 per cent up on the second half of 2009. The bank, which is based in London but makes about four-fifths of its profit in Asia, said impairment losses on loans dropped to $437m from $1.09bn a year earlier.

However, the bank’s $7.9bn revenue was a shade below the forecasts of analysts including Nomura’s Raul Sinha, who was expecting $8bn. This has led investors to question the forward momentum of the bank.

Matrix Corporate Capital analyst Andrew Lim said: “The growth trajectory is now being called into question. Growth in operating income has slowed, and growth in costs increased. A near-term advance in the share price will be difficult from here.”

Standard Chartered chief executive said the rising costs are the result of the bank taking advantage of investment opportunities in the wake of the financial collapse. He also said operating income was affected by restructuring costs associated with a US acquisition