StanChart chief rules out job cuts after strong beginning to year
Standard Chartered group chief executive Peter Sands is the latest top banker attempting to restore the confidence of investors, announcing the London-based lender has adequate capital and has made a strong start to the year.
In a rare sign of good news in the banking sector, Mr Sands declared that the bank had no plans to sack staff or reduce their salaries.
Speaking in Hong Kong yesterday, Mr Sands said this year would be challenging but 'it is not all bad news'. He said the stimulus measures adopted by the United States and efforts by the Group of 20 leaders to find ways to solve the financial crisis would improve the economy.
'We have made a strong start this year with a strong performance in January and February,' he said. 'Corporate lending may be affected by the economic downturns. However, the loan impairment ratio in our consumer banking in the first quarter this year will be better than the fourth quarter last year.'
Mr Sands is the latest top banker to give positive signals to try to assure investors that banks have started to recover from the worst financial meltdown in decades.
Citigroup, Bank of America Corp and HSBC Holdings executives in recent weeks have all said they have performed well in the past two months.
While Mr Sands said he would never rule out any fund-raising plans, he played down such a possibility, saying he was 'comfortable' with Standard Chartered's capital ratio.
The lender, which focuses on Asia, Africa and the Middle East, reported its tier-one ratio stood at 10.1 per cent at the end of last year, up from 8.5 per cent at the end of June last year.
The strong capital ratio came on the heels of a rights issue in November that raised about HK$20 billion. Mr Sands said the lender had been careful to select high quality equity for its capital management.
Standard Chartered was among the few lenders this month to post better than expected results - 17.24 per cent profit growth for last year. The growth was mainly driven by expansion of its wholesale banking business.
The strength of the lender has prompted the market to speculate it may be a buyer of its troubled rivals. Some media outlets have reported Standard Chartered is studying whether it should buy the Asian assets of Royal Bank of Scotland Group.
Mr Sands said he would not comment on individual deals but added the lender would like to focus on organic growth.
He said organic growth represented 80 per cent of its revenue last year so it would only consider acquisition opportunities if they could help enhance its business in Asia, Africa and the Middle East.
'We would consider acquisition only if it is financially attractive and its strategies compelling,' he said.
