STANDARD Chartered beat expectations with an 17 per cent jump in pre-tax profit, it revealed yesterday, with a drop in impairments and a rising in top-line income boosting the bank’s earnings to £3.6bn.
But chief executive Peter Sands warned that “our biggest risk by far remains regulatory risk”, over and above the prospect of a Chinese slowdown or western debt crises.
He said that banks are mired in uncertainty, with the UK alone introducing three overlapping capital regimes stemming from the Financial Stability Board, the EU and the Independent Commission on Banking (ICB).
“The process is chaotic. Unintended consequences pose a risk – too many actors doing too many things at once without thinking about the consequences,” he said. “There’s a need for greater policy coordination.”
He added, though, that StanChart remains “above the fray” due to its strong 11.8 per cent core tier one capital ratio, but that the chaotic policy reform could have severe consequences for financial stability.
“We have multiple enginges of growth – when one or two are slow, others run fast,” he said. That showed up in the bank’s half-year results, where its Hong Kong private banking business saw income soar 63 per cent, while its Indian bank’s revenues slumped 12 per cent.
Despite suffering from rising wage inflation in Asia, the bank kept a lid on costs, with expenses flat on last year. Unlike other lenders, it is hiring and expects to have boosted its headcount by 2,000 by the end of this year to 86,000.