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Wed, Mar 18, 2009 - Page 10 News List

Standard Chartered starts the year off ‘very strongly’

AP , HONG KONG

British bank Standard Chartered PLC has started the year “very strongly” but faces more challenges ahead as the world economy struggles through its worst downturn in decades, the company’s chief executive said yesterday.

Standard Chartered is the latest Western-based bank to reassure investors about its earnings amid the global financial turmoil.

Citigroup Inc, Britain’s Barclays PLC and others have offered similar upbeat assessments in recent days.

“We’ve started the year very strongly,” CEO Peter Sands told reporters in Hong Kong.

Sands said the bank was “very comfortable” with its capital position. At the end of last year, Standard Chartered raised US$1.8 billion in a rights issue. Its Tier-1 capital ratio — the most widely used measure of a bank’s solvency — stands at just over 10 percent.

“I would never rule out raising more capital, but we are very comfortable with our capital position,” Sands said.

Still, rising unemployment in its key markets could weigh on the bank, he said. The bank could continue to suffer deterioration in its loan book for the first quarter, but the losses were expected to be less than in the fourth quarter.

The company has no plans to cut jobs, Sand said, though he wouldn’t offer a detailed financial outlook for the year.

Standard Chartered focuses on emerging markets and derives nearly all its revenues from Asia, the Middle East and Africa.

The bank would consider acquisitions as it looks to grow in those markets, Sands said, although he added the bank preferred to expand organically rather than by purchasing other companies.

Last week, the company reported 17 percent rise in profits for last year, driven by growth in wholesale banking.,

For the year ending Dec. 31, Standard Chartered reported a profit of US$3.3 billion, up from US$2.8 billion in 2007. Operating income rose 26 percent to US$13.97 billion and total assets rose 32 percent to US$435 billion.

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