Standard Chartered to up investment plans
STANDARD Chartered will accelerate its investment plans on the back of what chief executive Peter Sands called a “strong start to 2012”.
The bank gave a trading update yesterday, flagging “high single digit growth” in revenues. That was below its usual double digit growth, however, which the bank blamed mainly on “the continued strength of the US dollar against Asian currencies in the first quarter”.
Nonetheless, Sands said: “[We] are very well positioned in dynamic markets with strong fundamentals. We are in excellent shape, we are a growth company and are differentiated by our liquidity and capital strength.”
He told analysts that the bank will now bring forwards its investment plans with a focus on China
The one dark spot remains India, where political gridlock and an unpredictable protectionist regime has slowed activity among StanChart’s corporate clients, leading to “subdued domestic business sentiment in India”, the bank said.
That was in contrast to “diverse double digit income growth in Hong Kong, Malaysia, Indonesia, China, the Americas” and even in Britain and the troubled European continent.
Sands warned that the bank would continue to keep an eye on “the clear uncertainties” in Europe as a major risk factor to the global economy. The bank saw the biggest growth in its consumer bank, particularly in its deposit accounts, personal loans and credit cards businesses, while wealth management was “flat” on last year so far and mortgage lending is down.
Its wholesale bank, which is largely driven by big business clients including Samin Tan, the Indonesian billionaire and part owner of Bumi, grew slightly less strongly “at a high single digit rate over the comparable period in 2011”.
It is seeing intense competition in trade finance from international US banks.
Credit Suisse analysts said: “[The update] looks broadly in-line with our expectations, although income growth is slightly weaker (primarily Wholesale Banking, India) offset by lower costs.”
Shore Capital broadly agreed, calling the outlook “slightly disappointing, in our view, reflecting slower than anticipated income growth. However, this was offset by better than expected performance on costs and impairments.”