StanChart sees profit growth dipping below 10pc
Standard Chartered Bank expects first-half revenue and pre-tax profit growth to drop below 10 per cent from a year ago as regional currencies weaken against the US dollar and key economies slow down.
'Local currency weakness is expected to drag group income by over 2 per cent, with the Indian rupee being a major contributor,' the bank said in a statement filed with the Hong Kong exchange yesterday.
Most of its income comes from Asia, the Middle East and Africa.
Standard Chartered said in March that it was aiming for 'double-digit growth' in revenue again this year after booking record annual profits for a ninth consecutive year in 2011 despite setbacks in two of its largest Asian markets - South Korea and India.
Net profit rose 12 per cent to US$4.85 billion last year on the back of strong consumer banking growth.
It expects first-half double-digit income growth in South Korea as a result of a US$70 million property sale, the statement said. Cost pressures remain but are easing thanks to a regional early retirement push.
The weakening rupee is expected to hold back first-half income in India, but the bank expects 'mid-single-digit rate' growth in the period.
Standard Chartered's cost-income ratio improved in the first half, while headcounts were flat at the end of May from a year earlier.
The bank said it had no direct sovereign exposure to Portugal, Italy, Ireland, Greece or Spain. Its total direct exposure to the countries remained at less than 0.5 per cent of assets.
It expects 'mid-single-digit' income growth in consumer banking in the first half compared with a year ago, partly because of weak growth in Hong Kong and South Korea, where mortgage income has fallen.
In India and Taiwan, consumer banking was affected by a poor performance in the foreign exchange and wealth management businesses.
The bank expected 'double-digit income growth' in wholesale banking in the first half on the back of a strong performance in cash, trade and associated foreign exchange businesses.