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June 28 (Bloomberg) -- Standard Chartered Plc, the U.K.’s third-largest bank by market value, said it may post “double- digit” growth in first-half revenue and pretax profit as it tightened control on expenses.
Revenue from markets including Hong Kong, Singapore and China helped offset a decline in India and “muted” growth in Africa, the London-based bank said today in a statement. Its net interest margin, a measure of profitability on lending, is “broadly flat” compared with 2010, it said.
Expenses at the lender, which earns most of its profit in Asia, are likely to grow in line with revenue even after the U.K.’s levy on banks’ balance sheets, Chief Executive Officer Peter Sands said. Standard Chartered, seeking its eighth successive year of record earnings, in May said it will align revenue and cost growth after hiring 7,000 people last year.
“This is a good sign as it shows that there’s improvement in the bank’s cost management and that its costs are under control,” Dominic Chan, a Hong Kong-based analyst at BNP Paribas SA who rates the stock a “buy,” said by phone. “Looking forward, we need to pay attention to the revenue growth momentum” of its corporate banking business, he added.
Standard Chartered shares climbed 2.7 percent to 1,581 pence in London, paring its decline this year to 8.4 percent.
Corporate banking revenue may experience “single digit” growth for the first half, Standard Chartered said.
Headcount is about 1,200 below December 2010 levels, Finance Director Richard Meddings told journalists on a conference call today. The bank plans to hire net about 1,000 people this year and has a “firm grip” on expenses, Meddings said.
The bank has “a very strong balance sheet which remains highly liquid, very well capitalized, diverse and conservative,” Sands said in the statement today. The bank is “capturing increasing levels of business from our markets across Asia, Africa and the Middle East.”
The bank’s roots date back to British colonial expansion in Africa and India in the 19th century. The lender is 15.5 percent-owned by Temasek Holdings Pte, Singapore’s state investment company, according to Bloomberg data.
--With assistance from Jon Menon in London. Editors: Jon Menon, Francis Harris
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