Sands gets costs under control
HOW many bank bosses wish they could include the following sentence in a statement to the stock exchange? “The group is in excellent shape and well positioned in growth markets.”
Yet that was the message from Standard Chartered boss Peter Sands yesterday, when he updated markets on the bank’s third quarter. Income growth slowed a little, due to local difficulties in India, but should return to double digit percentage levels for the full year.
The bank is still reaping the rewards from avoiding risky bets prior to the crisis and from its exposure to Asia.
But its strength in emerging markets has proved to be the source of its biggest problem: rising costs. Highly educated bankers who are well-versed Mandarin – or the myriad of other languages the bank’s staff speak – are hard to come by. And they’re certainly not cheap.
But there was even good progress on this front. While costs have continued to rise, with headcount up by around 750 this year, income has risen even faster. That means the closely-watched cost-to-income ration, which stood at 56 per cent in the first half, is starting to fall.