Emerging markets-focused lender Standard Chartered (StanChart) said that the robust income growth seen in the first quarter continued into the second, although foreign exchange (FX) movements are still limiting the increase.
Income growth in the six months to June 30th is still expected to be at a high single-digit rate over the comparable period in 2011. However, the continued strength in the US dollar against currencies in its footprint is expected to drag group income by over 2%, with the Indian Rupee being a major contributor.
"Against the background of a slowing and turbulent global economy, Standard Chartered has continued to deliver strong growth," said Chief Executive Peter Sands.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
"We are seeing good momentum across many of our businesses and geographies and are winning market share as we again increase our financial support and lending to our customers and clients. We remain in growth mode and continue to see significant opportunities in our footprint of Asia, Africa and the Middle East."
The group assured that is has no direct "sovereign exposure" to Portugal, Italy, Ireland, Greece or Spain: its total direct exposure to these countries is less than 0.5% of group assets.
In Consumer Banking, the group expects only mid single-digit income growth in the first half due to "muted" income performances in Hong Kong and Korea where Mortgage income has fallen. India continues to be affected by FX movements while Taiwan has seen subdued Wealth Management income.
Given the slowdown in Wealth Management, the one-off recoveries in the cost line last year and flat loan impairment growth, StanChart expects a double-digit reduction in Consumer Banking operating profit in the first half.
The Wholesale Banking division appears to be performing slightly better, with double-digit growth expected in the first half, with Commercial Banking, Trade and Cash, and Corporate Finance trading well.
"The group has strong momentum, is accelerating investment and is on course to deliver on its financial objectives for the full year."
BC
