Standard Chartered first-half profits plummet 20pc
Second half seen as better though full year still expected to fall below 2013, dragged down by softness in foreign exchange and rates business
Embattled Standard Chartered chief executive Peter Sands pledged the bank will perform better in the second half of 2014 after its interim earnings report showed pre-tax profits tumbling 20 per cent to US$3.3 billion in the first half, in line with what investors had expected after a surprise profit warning in late June.
Profits this year would fall below those in 2013, the bank's new finance director Andy Halford said at a conference for investors in London yesterday, although he noted that profits in the second half would be higher than in the same period last year.
Standard Chartered and HSBC Holdings, which reported a 12 per cent year-on-year decline in profits before tax on Monday, have emphasised the importance of higher interest rates in the US and the positive effects that would have on financial markets businesses, Jim Antos, an analyst at Mizuho Securities Asia, told the South China Morning Post.
"The managements [at HSBC and StanChart] are really dependent on something in the environment changing, not something they can change themselves," Antos said. "How discouraging is that?"
Standard Chartered's profits attributable to shareholders increased by 8 per cent during the first six months of the year to US$2.31 billion. The bank's declared interim dividend remained flat at 28.8 US cents per share.
As projected in June, financial markets income fell by US$432 million, or about 20 per cent, with the greatest reduction in income from the bank's foreign exchange and rates businesses.