Bloomberg News

Standard Chartered Revenue Grew ‘High Single Digit’ Rate

May 02, 2012

Standard Chartered Plc (STAN), the U.K.’s second-largest bank by market value, said it had “high single digit” revenue growth in the first quarter, driven by consumer and wholesale-banking operations.

Revenue growth was curbed by the U.S. dollar’s strength against Asian currencies, the London-based lender said in a statement today, without giving specific figures. Operating profit expanded by a “low double digit” rate from a year earlier, the bank said. The lender is alone among Britain’s five biggest banks in not disclosing detailed quarterly earnings.

Growth of 10 percent or more in markets including Hong Kong, Malaysia, Indonesia and China compensated for “subdued” business sentiment in India, Standard Chartered, said. Finance Director Richard Meddings said the bank, which got more than 73 percent of pretax profit from Asia last year, started 2012 with “good momentum” and is on target for “double-digit” revenue growth this year. The lender plans to invest in its businesses in China, Hong Kong and add branches in Africa, he added.

“We continue to be positive towards the group, as it operates in growth markets and has a balance sheet that doesn’t need repositioning,” Chintan Joshi, an analyst at Nomura International Plc in London, wrote in a report to clients today. “However, the statement doesn’t suggest an upgrade to expectations at this stage, and in the past upgrades have been a catalyst for share price performance.”

Standard Chartered shares fell 3.9 percent to 1,453 pence in London trading. The Bloomberg Europe Banks and Financial Services Index was 1.9 percent lower.

Accelerating Investment

“We’re investing in Hong Kong, China, in branches in Africa on an accelerated basis and ahead of budget,” Meddings said on a call with journalists today. “The acceleration in investment is a real sign of confidence.”

The bank said it would hire as many as 2,000 people in 2012 after posting record earnings last year while lenders including HSBC Holdings Plc, Royal Bank of Scotland Group Plc and Barclays Plc cut jobs. Headcount at the end of March was “broadly flat” as compared with the end of last year, Standard Chartered said.

“They are pretty protected even if the West has a very weak economic prospect for this year,” James Antos, a Hong Kong-based analyst at Mizuho Securities Asia Ltd., said by telephone today. “Their business is really emerging-markets oriented: Africa, the Middle East and Asia primarily.”

The European Central Bank’s 1 trillion-euro ($1.3 trillion) longer-term refinancing operation meant many banks that would otherwise have pulled back from Asia as they shrank their balance sheets haven’t had to, Meddings said today in an interview with Bloomberg Television’s Maryam Nemazee. The sovereign debt crisis could yet produce a “shock” that would negatively affect global trade volumes, he added.

“Macroeconomic sentiment is showing signs of improvement, although there remain clear uncertainties and risks in the global environment,” Chief Executive Officer Peter Sands said in today’s statement.

To contact the reporters on this story: Howard Mustoe in London at hmustoe@bloomberg.net; Nathaniel Espino in Beijing at nespino@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

May 2 (Bloomberg) -- Standard Chartered Plc Finance Director Richard Meddings talks about revenue growth targets, deleveraging in the euro area and the European Central Bank’s longer-term refinancing operations. He speaks with Maryam Nemazee on Bloomberg Television's "The Pulse." (Source: Bloomberg)

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