Connect with us

Banking

Standard Chartered first half profit up 17% to US$ 3.64bn

Published

on

gbaf1news

Diverse income and product streams drive double-digit income growth
Highlights:
• Group income climbs 11%, with strong momentum across products and markets.
• Expenses tightly managed; with income growing faster than costs.
• Capital position strengthened further with Core Tier 1 ratio of 11.9%.
• Highly liquid balance sheet; deposits grow 19% to US$343bn; strong A/D ratio of 78.1%.
• Consumer Banking delivers 58% profit growth, as repositioning progresses.
Wholesale Banking profit up 5% to record $2.59bn.
• Continued performance for shareholders, with RoE of 13%, dividend up 10%
Standard Chartered PLC today announced a ninth successive record first half of profit with income growing by 11 per cent* to US$8.76 billion as profit climbed 17 per cent to US$3.64 billion. The Group produced diverse and resilient income growth across a number of products and geographies, driven by recent investment in new product capabilities and income streams. Income growth is underpinned by a highly liquid, well funded and growing balance sheet, while we maintain strong cost control. With rapidly developing trade and investment flows across our footprint, allied to a fast-growing middle class, Standard Chartered sees strong opportunities for further organic growth across Asia, Africa and the Middle East.
The Group continues to focus on the strength of the balance sheet in order to support organic growth and support our customers, whilst ensuring we are well insulated from macro-economic and regulatory uncertainty. We have grown customer deposits and lending, as we take market share across as wide range of products despite increasing competition in a number of our markets. Customer deposits grew by 19 per cent or US$55 billion to US$343 billion, with the advances to deposits ratio remaining strong at 78.1 per cent. The Group continues to be highly liquid, with US$150 billion of cash or near cash assets, while we have no sovereign debt exposure to Portugal, Ireland, Italy, Greece or Spain.
Standard Chartered continues to support economic growth and development across our markets, with total lending climbing by 22 per cent and lending to SMEs up 38 per cent. We are supporting homeowners, with mortgage lending up by 19 per cent. The quality of the bank’s customer lending continues to improve, with 67 per cent of the Wholesale lending book having a maturity of under 12 months while the average loan-to-value on the mortgage book remains low at 49 per cent. At a Group level, loan impairments fell by six per cent to US$412 million, driven by further significant falls in Consumer Banking loan impairments of 29 per cent year on year. Wholesale Banking loan impairments rose 46 per cent to $201 million in the same period. We remain disciplined and proactive in our approach to risk management.
Geographic performance has been broad and well spread. With the exception of India, all regions have shown good increases in income, with Hong Kong up 29 per cent, and Singapore 20 per cent higher. Operating profit and income in India fell by 39 per cent and 12 per cent respectively, driven by rising interest rates and increasing competition resulting in falling net interest margins. Project and deal flow has slowed as business sentiment is impacted on the back of governance concerns in the market. We reiterate our view that India will be the third largest economy in the world by 2030, and given our strength and competitive position, we are well-positioned for the upturn.
Wholesale Banking and Consumer Banking saw increased business activity across a number of products and services, as the Group captured market share from our competitors.
Consumer Banking performed strongly in the first half with income and profit growing 15 per cent and 58 per cent respectively, as the transformation programme progresses well. Income growth was broad-based, with strong volume increases in mortgages, credit cards and personal loans, as the business also continued to attract strong deposit growth. With a strong bias towards deposits, the bank is also well placed to benefit from an uptick in liability margins across several of our core markets. As Asia’s emerging middle class continues to expand, the high value segments of private banking, priority banking and SME banking all grew at more than 10 per cent.
Wholesale Banking saw client income grow by nine per cent to a record level of US$4.44 billion, while overall first half income and profit levels grew by eight per cent and five per cent respectively, also to record levels. Client income now accounts for 82 per cent of Wholesale income. We continue to support trade and investment flows to and from our markets, investing in new product and service sets to meet client demand, whilst further broadening the income base. Trade finance income grew 11 per cent, foreign exchange by 19 per cent, with commodities and equities growing by 93 per cent, while the capital markets business grew income by 16 per cent. Cash management volumes continued to build, up 26 per cent, with income up 33 per cent. Wholesale Banking continues to grow income and profit, whilst maintaining strong cost and risk controls, and with robust transaction pipelines for the second half of 2011.
Peter Sands, Group Chief Executive, Standard Chartered said:
“This is a very strong set of results – we have delivered record income and profit, grown our balance sheet, and raised our capital levels and dividend. Our growth is resilient and diverse. With a unique position at the heart of growing trade and investment flows between Asia, Africa and the Middle East, with their fast-expanding middle classes, we continue to see significant opportunities for profitable growth across our network.”

Banking

ECB stays put but warns about surge in infections

Published

on

ECB stays put but warns about surge in infections 1

By Balazs Koranyi and Francesco Canepa

FRANKFURT (Reuters) – The European Central Bank warned on Thursday that a new surge in COVID-19 infections poses risks to the euro zone’s recovery and reaffirmed its pledge to keep borrowing costs low to help the economy through the pandemic.

Having extended stimulus well into next year with a massive support package in December, ECB policymakers kept policy unchanged on Thursday, keen to let governments take over the task of keeping the euro zone economy afloat until normal business activity can resume.

But they warned about a new rise in infections and the ensuing restrictions to economic activity, saying they were prepared to provide even more support to the economy if needed.

“The renewed surge in coronavirus (COVID-19) infections and the restrictive and prolonged containment measures imposed in many euro area countries are disrupting economic activity,” ECB President Christine Lagarde said in her opening statement.

Fresh lockdowns, a slow start to vaccinations across the 19 countries that use the euro, and the currency’s strength will increase headwinds for exporters, challenging the ECB’s forecasts of a robust recovery starting in the second quarter.

Lagarde saluted the start of vaccinations as “an important milestone” despite “some difficulty” and said the latest data was still in line with the ECB’s forecasts.

She conceded that the strong euro, which hit a 2-1/2 year high against the dollar earlier this month, was putting a dampener on inflation and reaffirmed that the ECB would continue to monitor the exchange rate.

The euro has dropped 1% on a trade-weighted basis since the start of the year, but is up nearly 7% over the last 12 months. Against the U.S. dollar, that number rises to over 10%.

MORE STIMULUS?

Opening the door for more stimulus if needed, Lagarde confirmed the ECB would continue buying bonds until “it judges that the coronavirus crisis phase is over”.

Lagarde also kept a closely watched reference to “downside” risks facing the euro zone economy, which has been a reliable indicator that the ECB saw policy easing as more likely than tightening.

But she signalled those risks were less acute, in part thanks to the recent Brexit deal.

“The news about the prospects for the global economy, the agreement on future EU-UK relations and the start of vaccination campaigns is encouraging,” Lagarde said. “But the ongoing pandemic and its implications for economic and financial conditions continue to be sources of downside risk.”

Lagarde conceded that the immediate future was challenging but argued that should not impact the longer term.

“Once the impact of the pandemic fades, a recovery in demand, supported by accommodative fiscal and monetary policies, will put upward pressure on inflation over the medium term,” Lagarde said.

Benign market indicators support Lagarde’s argument. Stocks are rising, interest rates are steady and government borrowing costs are trending lower, despite some political drama in Italy.

There is also around 1 trillion euros of untapped funds in the Pandemic Emergency Purchase Programme (PEPP) to back up her pledge to keep borrowing costs at record lows.

The ECB has indicated it may not even need it to use it all.

“If favourable financing conditions can be maintained with asset purchase flows that do not exhaust the envelope over the net purchase horizon of the PEPP, the envelope need not be used in full,” Lagarde said.

Recent economic history also favours the ECB. When most of the economy reopened last summer, activity rebounded more quickly than expected, indicating that firms were more resilient than had been feared.

Uncomfortably low inflation is set to remain a thorn in the ECB’s side for years to come, however, even if surging oil demand helps put upward pressure on prices in 2021.

With Thursday’s decision, the ECB’s benchmark deposit rate remained at minus 0.5% while the overall quota for bond purchases under PEPP was maintained at 1.85 trillion euros.

(Editing by Catherine Evans)

Continue Reading

Banking

Bank of Japan lifts next year’s growth forecast, saves ammunition as virus risks linger

Published

on

Bank of Japan lifts next year's growth forecast, saves ammunition as virus risks linger 2

By Leika Kihara and Tetsushi Kajimoto

TOKYO (Reuters) – The Bank of Japan kept monetary policy steady on Thursday and upgraded its economic forecast for next fiscal year, but warned of escalating risks to the outlook as new coronavirus emergency measures threatened to derail a fragile recovery.

BOJ Governor Haruhiko Kuroda said the board also discussed the bank’s review of its policy tools due in March, though dropped few hints on what the outcome could be.

“Our review won’t focus just on addressing the side-effects of our policy. We need to make it more effective and agile,” Kuroda told a news conference.

As widely expected, the BOJ maintained its targets under yield curve control (YCC) at -0.1% for short-term interest rates and around 0% for 10-year bond yields.

In fresh quarterly projections, the BOJ upgraded next fiscal year’s growth forecast to a 3.9% expansion from a 3.6% gain seen three months ago based on hopes the government’s huge spending package will soften the blow from the pandemic.

But it offered a bleaker view on consumption, warning that services spending will remain under “strong downward pressure” due to fresh state of emergency measures taken this month.

“Japan’s economy is picking up as a trend,” the BOJ said in the report, offering a slightly more nuanced view than last month when it said growth was “picking up.”

While Kuroda reiterated the BOJ’s readiness to ramp up stimulus further, he voiced hope robust exports and expected roll-outs of vaccines will brighten prospects for a recovery.

“I don’t think the risk of Japan sliding back into deflation is high,” he said, signalling the BOJ has offered sufficient stimulus for now to ease the blow from COVID-19.

NO EXIT EYED

Many analysts had expected the BOJ to hold fire ahead of a policy review in March, which aims to make its tools sustainable as Japan braces for a prolonged battle with COVID-19.

Sources have told Reuters the BOJ will discuss ways to scale back its massive purchases of exchange-traded funds (ETF) and loosen its grip on YCC to breathe life back into markets numbed by years of heavy-handed intervention.

Kuroda said the BOJ may look at such options at the review, but stressed a decision will depend on the findings of its scrutiny into the effects and costs of YCC.

He also made clear any steps the BOJ would take will not lead to a withdrawal of stimulus.

“It’s too early to exit from our massive monetary easing programme at this point,” Kuroda said. “Western economies have been deploying monetary easing steps for a decade, and none of them are mulling an exit now.”

(Reporting by Leika Kihara and Tetsushi Kajimoto; additional reporting by Kaori Kaneko; Editing by Simon Cameron-Moore & Shri Navaratnam)

Continue Reading

Banking

World Bank, IMF agree to hold April meetings online due to COVID-19 risks

Published

on

World Bank, IMF agree to hold April meetings online due to COVID-19 risks 3

WASHINGTON (Reuters) – The International Monetary Fund and the World Bank have agreed to hold their spring meetings, planned for April 5-11, online instead of in person due to continued concerns about the coronavirus pandemic, they said in joint statement.

The meetings usually bring some 10,000 government officials, journalists, business people and civil society representatives from across the world to a tightly-packed two-block area of Washington that houses their headquarters.

This will be the third of the institutions’ semiannual meetings to be held virtually due to the pandemic.

(Reporting by Andrea Shalal; Editing by Chris Rees

Continue Reading
Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

Call For Entries

Global Banking and Finance Review Awards Nominations 2021
2021 Awards now open. Click Here to Nominate

Latest Articles

The Beaconsoft story and introducing its one-of-a-kind digital campaign intelligence platform 4 The Beaconsoft story and introducing its one-of-a-kind digital campaign intelligence platform 5
Interviews2 days ago

The Beaconsoft story and introducing its one-of-a-kind digital campaign intelligence platform

By Nigel Bridges, founding CEO of Beaconsoft Limited What were you doing prior to setting up Beaconsoft? Before setting up...

Top 8 Tax Scams to Watch Out For 6 Top 8 Tax Scams to Watch Out For 7
Finance2 days ago

Top 8 Tax Scams to Watch Out For

It is tax time and that means finding the best way to file your taxes and to get a refund...

Hisham Itani and Resource Group Recognized in the 2020 Global Banking & Finance Awards® 8 Hisham Itani and Resource Group Recognized in the 2020 Global Banking & Finance Awards® 9
Technology2 days ago

Hisham Itani and Resource Group Recognized in the 2020 Global Banking & Finance Awards®

Global Banking & Finance Review has awarded Hisham Itani the Chairman and CEO of Resource Group, Technology CEO of the...

Euro zone business activity shrank in January as lockdowns hit services 10 Euro zone business activity shrank in January as lockdowns hit services 11
Business2 days ago

Euro zone business activity shrank in January as lockdowns hit services

By Jonathan Cable LONDON (Reuters) – Economic activity in the euro zone shrank markedly in January as lockdown restrictions to...

Volkswagen's profit halves, but deliveries recovering 12 Volkswagen's profit halves, but deliveries recovering 13
Business2 days ago

Volkswagen’s profit halves, but deliveries recovering

BERLIN (Reuters) – Volkswagen reported a nearly 50% drop in its 2020 adjusted operating profit on Friday but said car...

Global chip shortage hits China's bitcoin mining sector 14 Global chip shortage hits China's bitcoin mining sector 15
Business2 days ago

Global chip shortage hits China’s bitcoin mining sector

By Samuel Shen and Alun John SHANGHAI/HONG KONG (Reuters) – A global chip shortage is choking the production of machines...

Iran's oil exports rise 'significantly' despite sanctions, minister says 16 Iran's oil exports rise 'significantly' despite sanctions, minister says 17
Business2 days ago

Iran’s oil exports rise ‘significantly’ despite sanctions, minister says

DUBAI/LONDON (Reuters) – Iran’s oil exports have climbed in recent months and its sales of petroleum products to foreign buyers...

Nissan to source more UK batteries as part of Brexit deal 'opportunity' 18 Nissan to source more UK batteries as part of Brexit deal 'opportunity' 19
Business2 days ago

Nissan to source more UK batteries as part of Brexit deal ‘opportunity’

By Costas Pitas LONDON (Reuters) – Nissan will source more batteries from Britain to avoid tariffs on electric cars after...

Muted recovery for UK retailers in December ends worst year on record 20 Muted recovery for UK retailers in December ends worst year on record 21
Business2 days ago

Muted recovery for UK retailers in December ends worst year on record

By David Milliken and Andy Bruce LONDON (Reuters) – British retailers struggled to recover in December from a partial coronavirus...

Chinese phone maker Honor partners with key chip suppliers after Huawei split 22 Chinese phone maker Honor partners with key chip suppliers after Huawei split 23
Business2 days ago

Chinese phone maker Honor partners with key chip suppliers after Huawei split

By David Kirton SHENZHEN, China (Reuters) – Chinese budget phone maker Honor said on Friday it had signed partnerships with...

Newsletters with Secrets & Analysis. Subscribe Now