Business | Banking
Standard Chartered profit rises 25%
Standard Chartered Plc, the only UK bank trading higher than a year ago, said 2007 profit increased 25 per cent, driven by lending in India, Hong Kong and the Middle East.
- Bloomberg
- Published: 00:05 February 27, 2008
London: Standard Chartered Plc, the only UK bank trading higher than a year ago, said 2007 profit increased 25 per cent, driven by lending in India, Hong Kong and the Middle East.
Net income rose to $2.84 billion, or $1.99 a share, from $2.28 billion, or $1.67, in 2006, the London-based bank said yesterday in a Regulatory News Service statement. That beat the $2.76 billion median estimate of 10 analysts.
Increasing presence
Standard Chartered, which gets 90 per cent of its profit from Asia, Africa and the Middle East, said in December 2007 it plans to increase investment in emerging economies, which have grown faster than the UK and US The bank spent $2.7 billion on acquisitions since 2006, including Hsinchu International Bank in Taiwan and Union Bank Ltd. in Pakistan.
Standard Chartered is up 4.4 per cent in London trading from a year ago, making it the sole gainer in the nine-member FTSE 350 Banks Index, down 29 per cent.
Temasek Holdings Pte, Singapore's sovereign wealth fund, raised its holding in Standard Chartered a year ago to 19 per cent from 11 per cent.
Standard Chartered took a writedown on the Whistlejacket Capital Ltd. structured investment vehicle, reducing profit by $300 million. Since the collapse of the US subprime market, investors have shunned securities that can't be valued, forcing Standard Chartered to buy back and mark down the SIV's assets.
Standard Chartered also said it would take a $133 million charge in 2007 on mortgage securitisations in Korea.
Comment: Temasek hike 'hypothetical'
Standard Chartered Plc values its ability to issue notes in Hong Kong, its Asian chief executive officer Jaspal Bindra told reporters yesterday.
The Hong Kong government may revoke Standard Chartered's ability to issue money should Temasek Holdings Pte raise its stake in the UK bank to 20 per cent, according to a rule by the city's de facto central bank. Standard Chartered has been issuing notes in Hong Kong for 146 years.
Temasek, a Singapore sovereign wealth fund, owns 19 per cent of Standard Chartered. "It's a hypothetical question to assume that Temasek will breach the 20 per cent holding. It's really between Temasek and the Hong Kong Monetary Authority."
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