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Thu, Aug 05, 2010 - Page 10 News List

Standard Chartered profit rises, Lloyds back in the black

AFP , LONDON

British bank Standard Chartered said yesterday that net profits rose 9.5 percent in the first half of the year, as bad debts more than halved at the emerging markets group.

After-tax profits climbed to US$2.181 billion in the first six months of the year, compared with US$1.991 billion in the same period last year, the lender said in a results statement.

Loan impairment losses fell sharply to US$437 million in the first half, compared with US$1.09 billion dollars last time around.

The group, which derives more than 90 percent of its income from emerging markets, said that pre-tax profits increased to US$3.12 billion, up from US$2.84 billion, in line with market expectations.

“We continued our strong performance in the first half of 2010 and both of our businesses have had an encouraging start to the second half,” chairman John Peace said in comments accompanying the release.

Britain’s state-rescued Lloyds Banking Group also said yesterday that it bounced back into pre-tax profit in the first half, after a massive loss last year, despite challenging conditions.

Pre-tax profit stood at £1.6 billion (US$2.5 billion) in the six months ending June, compared with a loss of £4 billion in the same period last year, it said in a statement.

“The first half of 2010 was a significant milestone for Lloyds Banking Group as the group returned to profit,” CEO Eric Daniels said in the earnings release.

Lloyds Banking Group is 41 percent owned by the British government after a massive state bailout at the height of the global financial crisis.

Separately, state-controlled Royal Bank of Scotland (RBS) said yesterday it had agreed to sell 318 branches to Spanish group Santander in a long-awaited deal.

“RBS announces today that it has agreed to sell 318 branches and associated assets and liabilities to Santander UK PLC for a premium of £350 million to net assets at closing,” it said in a statement.

The bailed-out bank, which is due to unveil first-half profits tomorrow, said it would sell the branches in a transaction valuing them at £1.65 billion on Dec. 31 last year.

However, the final amount that Santander will pay for the business will not be clear until December next year, when the deal is expected to be completed, subject to regulatory approvals.

“This is an important milestone in our restructuring work and complements the significant momentum behind our recovery plan overall,” RBS chief executive Stephen Hester said in the statement.

The acquisition will see Spanish banking giant Santander add to the 1,300 branches it already owns in Britain after its takeovers of Abbey in 2004, Bradford & Bingley and Alliance & Leicester in late 2008.

RBS, 83 percent held by the UK government after being bailed out, had until 2013 to cut its branch network in line with a demand made by the European Commission, in exchange for the aid it received.

The sale comprises 311 RBS-branded outlets in England and Wales and seven NatWest-branded stores in Scotland.

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