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Standard Chartered Q1 Operating Profit Grows

5/2/2012 2:21 AM ET

Standard Chartered Plc (STAN.L,STAC.L,SCBFF.PK) on Wednesday said the group had a 'strong start' to 2012, with first-quarter operating profit increasing in low double digit rate. The British lender said both its consumer and wholesale banking businesses performed well, despite being impacted by the continued strength of the US dollar against Asian currencies.

In an interim management statement for the first quarter, the Asia-focused lender said it saw diverse double digit income growth in Hong Kong, Malaysia, Indonesia, China and the Americas, UK and Europe region. These more than compensated for the subdued domestic business sentiment in India.

The bank said it continues to make progress in Korea with the repositioning of its business and is seeing the benefits of the Early Retirement Program in the cost line.

Income increased in high single digit rate and exceeded cost growth as expenses remained under tight control. Loan impairment in the quarter was higher than last year, in line with expectation, with credit quality remaining good, the bank noted.

Chief Executive Peter Sands said, "Standard Chartered has had a strong start to 2012, with good performances across a broad spread of geographies and products. We continue to benefit from the disciplined execution of our strategy and are very well positioned in dynamic markets with strong fundamentals."

While announcing an 11 percent increase in pre-tax profit for 2011, its 'ninth successive year' of record performance, the bank in late February had said that it projects another year of double-digit growth. The bank expected huge opportunities in its core markets of Asia, Africa and the Middle East.

Sands added today that macroeconomic sentiment is showing signs of improvement, although clear uncertainties and risks in the global environment remain.

In its consumer banking segment, first-quarter income increased in 'good' single digit rate and continued to be broadly spread. Deposit income grew at a double digit rate, reflecting good volume growth and improved margins.

Income from Credit Cards and Personal Loans also increased in double digit rates. Meanwhile, wealth management income remained flat and mortgage income declined with assets broadly stable on the year end position and continued margin pressure.

The Wholesale Banking business had a strong start to 2012 with client income growing at a high single digit rate and continued to contribute around 80 percent of total segmental income. Commercial banking, comprising Cash, Trade and associated FX, continues to be the core of Wholesale business and performed well.

Citing the improved results in the quarter, Standard Chartered has approved an accelerated release of investment spend over and above budget levels. The lender said it remains very well capitalised and highly liquid.

In London, Standard Chartered shares closed Tuesday's regular trading session at 1,516.52 pence, up 10.52 pence or 0.70 percent.

In Hong Kong, the shares are currently trading at HK$191.30, down HK$0.20 or 0.10 percent.

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by RTT Staff Writer

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