Standard Chartered aided by Asian rally

STANDARD Chartered yesterday raised $1.7bn (&pound;1.02bn) in a share sale after reporting a 10 per cent jump in pre-tax profits for the first six months of the year.<br /><br />Pre-tax operating profit reached $2.84bn, beating the $2.59bn booked in the first half of 2008 and well ahead of an analysts&rsquo; consensus forecast provided by the bank of $2.49bn.<br /><br />Revenues were up 14 per cent from $6.99bn to $7.96bn as the Asia-focused bank benefited from increased client trading volumes and wide bid-offer spreads due to the rally in Asian stock markets.<br /><br />Standard Chartered is also in negotiations to buy businesses in India and China from RBS Asia for a sum in the low hundred millions, although a bank spokesman would not confirm the details of the transaction.<br /><br />Chief financial officer Richard Meddings told City A.M. that the $1.7bn raised from the share sale was &ldquo;categorically not a war chest&rdquo; targeted at making acquisitions.<br /><br />&ldquo;We will look at acquisitions but it will be in support of our strategy, not a strategy in itself, and will be very disciplined.&rdquo;<br /><br />Meddings said a 36 per cent surge in wholesale banking operating profit, to $2.25bn, was down to the bank building deeper relationships with existing clients as rivals dropped out of the market place.<br /><br />&ldquo;We&rsquo;re not in the business of giving competitors the opportunity to get market share back,&rdquo; he said.<br /><br />The strong performance in wholesale banking more than offset a 57 per cent decline in retail income, which fell to $348m.<br /><br />Chief executive Peter Sands said consumer banking was beginning to stabilise after a &ldquo;tough&rdquo; twelve months, pointing to two successive quarters of rising income and stabilising loan impairment.<br /><br />Group-wide, impairment was up from $465m in the first half of 2008 to $1.09bn, largely due to two projects in the Middle East and derivative losses in South Korea.<br /><br />The dividend was hiked 10 per cent to $21.23.<br /><br /><strong>STANDARD CHARTERED&rsquo;S SHARE SALE<br />UBS AND JPMORGAN CAZENOVE</strong><br /><br />UBS and JPMorgan Cazenove managed yesterday&rsquo;s successful share sale for Standard Chartered, raising $1.7bn (&pound;1.02bn) by selling shares at 1,360p each.<br /><br />The team at JPMorgan Cazenove, the broker led by chief executive Naguib Kheraj (left), was headed up by Jonathan Wilcox, a managing director in equity capital markets.<br /><br />At UBS, Tim Waddell, the co-head of UK investment banking, led the bank&rsquo;s management of the share sale.<br /><br />He was backed up by Chris Fox of the bank&rsquo;s financial institutions group, while Sam Kendall, a managing director in global capital markets, handled the book-building process.<br /><br />Standard Chartered, which raised &pound;1.8bn in a rights offer just nine months ago, said it would use the money to fund expansion in Asia and boost its capital strength. <br /><br />UBS and JPMorgan Cazenove have been Standard Chartered&rsquo;s first choice to manage rights issues over the past decade.