StanChart keeps double-digit growth goal

PUBLISHED : Saturday, 19 March, 2011, 12:00am
UPDATED : Saturday, 19 March, 2011, 12:00am

Standard Chartered will not change targets for double-digit income growth this year despite the turmoil in the Middle East and the unfolding nuclear disaster in Japan.

'The world is obviously a very turbulent place as the tragic events in Japan and the political turbulence in the Middle East demonstrate, but Standard Chartered is in very good shape,' said group chief executive Peter Sands, who added the bank started off with a record January both in profits and revenue.

The bank dodged a bullet during the global financial crisis, thanks to its 'big in Asia, Africa and Middle East' strategy. This year, all three regions face a rough start.

Sands said the bank remained committed to the Middle East despite armed conflicts between government forces and protesters in Bahrain, where the bank has about 500 staff.

'Some branches earlier this week were closed simply because of roadblocks that made it difficult ... to get to them,' he said. 'Our branches were open [on Thursday], and we will continue to operate there.'

Bahrain is a small island country near the western shores of the Persian Gulf.

Standard Chartered does not have operations in Tunisia and Libya. It has eight staff in Egypt.

HSBC Holdings, another bank that is expanding in the Middle East, also closed some branches in Manama, the capital of Bahrain, where it has more than 300 staff.

'In terms of our own business in Japan, this is a relatively small business that we have,' Sands said. 'At the moment, our business is operating in Tokyo with 100 per cent of the staff engaged.'

Standard Chartered doubled its workforce to more than 85,000 in the past five years to support its expansion in Asia, the Middle East and Africa.

'The bank's exposure in Japan is not big, percentage-wise, so I don't think it would affect their business that much,' said Louis Tse Ming-kwong, a director of VC Brokerage.

Tse said India was actually the most important region for the bank.

India became the largest profit contributor last year for the first time, with profits reaching US$45 million.

Sands also said the bank was not retreating from South Korea after it announced a shutdown of 27 branches in the country this week.

He said the move was mainly to help optimise portfolio and rid locations that were no longer profitable.

The bank booked a 29 per cent increase in net profit of US$4.23 billion for the year to December, compared with 2009. Operating income rose 5.8 per cent to US$16.1 billion and operating expenses jumped 13.5 per cent to US$9.02 billion.

Standard Chartered's shares yesterday rose HK$4.40, or 2.28 per cent, to HK$197.60, outperforming the Hang Seng Index, which closed up 0.07 per cent.