StanChart raises dividends, cuts back on top bonuses

Standard Chartered lifted its 2012 dividend payout 11 per cent but bonuses paid to top executives slipped amid higher regulatory costs.

Finance director Richard Meddings said he expected the bank would have to pay more than US$500 million this year in one-off regulatory costs. The bank said such costs remained a concern, with the amount imposed expected to be bigger owing to a growing balance sheet.

Chief executive Peter Sands said the bank shrank its bonus pool to US$1.43 billion last year, down from US$1.54 billion for 2011. Bonuses for Sands and Meddings fell 10 per cent to US$3.15 million and US$2.16 million respectively.

The bank will pay a final dividend of 56.77 US cents a share, 11 per cent more than in 2011.

Standard Chartered posted a 10th year of record earnings. Pre-tax profit rose 1 per cent to US$6.87 billion for last year, beating the mean estimate of US$6.84 billion. Excluding US$667 million in settlements with US regulatory authorities over money-laundering investigations, pre-tax profit rose 12 per cent. Net profit was up 1 per cent to US$4.79 billion.

Sands said the group started well this year, with consumer banking and wholesale banking ahead of the same time last year.

The share price was up 2.8 per cent at £18.29 (HK$213.46) in mid-afternoon trade in London.

Standard Chartered benefited from growing earnings in Hong Kong, South Korea and Africa. Hong Kong remained the biggest single-market contributor to the group's pre-tax profit. Business in mainland China reached US$1 billion of income for the first time. But profit in the Americas, Britain, Europe and India fell. Standard Chartered's core Tier 1 capital ratio stood at 11.7 per cent for last year, down 1 basis point from 2011.

Benjamin Hung Pi-cheng, chief executive of Standard Chartered in Hong Kong, expects mortgage loans to grow at mid-single digits for the industry this year following the government's efforts to curb speculation in the property market. The bank's Hong Kong mortgage portfolio grew 11 per cent last year.

The group reported a 10 per cent increase in Hong Kong revenue, reaching a record US$3.35 billion last year. Profit before tax rose 7 per cent to US$1.7 billion.

Income from consumer banking rose 6 per cent while that from wholesale banking increased 12 per cent compared with the previous year.

Net interest margin, the difference between loan income and the cost of funds relative to interest earning assets, for Hong Kong fell 16 basis points to 1.6 per cent. Hung said that was because growth in deposits was faster than that of loans. He expects the margin to be stable this year.

The group hired 2,200 staff in Asia last year and Jaspal Bindra, Asia chief executive, said the bank would continue to recruit.