TIDMSTAN
RNS Number : 5510C
Standard Chartered PLC
02 May 2012
Standard Chartered PLC
Interim Management Statement
2 May 2012
Standard Chartered today releases its Interim Management
Statement (IMS) for the first quarter of 2012.
Peter Sands, Group Chief Executive, commented, "Standard
Chartered has had a strong start to 2012, with good performances
across a broad spread of geographies and products. We continue to
benefit from the disciplined execution of our strategy and are very
well positioned in dynamic markets with strong fundamentals. We are
in excellent shape, we are a growth company and are differentiated
by our liquidity and capital strength. Macroeconomic sentiment is
showing signs of improvement, although there remain clear
uncertainties and risks in the global environment."
The Group had a strong start to the year, with high single digit
income growth over the comparative period of 2011. The Group's
first quarter performance builds on the excellent momentum seen at
the end of 2011 with good income progression in both businesses
over the comparable period. Income growth has, however, been
impacted by the continued strength of the USD against Asian
currencies in the first quarter, as indicated at the time of the
full year results.
From a geographic perspective, diverse double digit income
growth in Hong Kong, Malaysia, Indonesia, China and the Americas,
UK and Europe region has more than compensated for the impact of
subdued domestic business sentiment in India. In Korea, we continue
to make progress with the repositioning of our business and are
seeing the benefits of the Early Retirement Programme (ERP) in the
cost line.
Across the Group, expenses remain under tight control; in the
first quarter income growth exceeded cost growth. Headcount levels
at the end of the first quarter were broadly flat on the end of
2011. In light of the Group's strong start to 2012 we have approved
an accelerated release of investment spend over and above budget
levels.
In the first quarter loan impairment was above the level seen in
the comparable period of 2011, in line with expectation, with
credit quality remaining good. The increase year on year was driven
by Consumer Banking, where loan impairment has increased in line
with disciplined growth in the book and mix change, as previously
guided.
Overall the Group delivered low double digit growth in operating
profit in the first quarter over the comparable period in 2011.
The Group remains highly liquid and well capitalised and we
continue to see disciplined growth on both sides of the balance
sheet, in both Consumer Banking and Wholesale Banking. Risk
Weighted Asset growth was well controlled in the first quarter of
2012.
Consumer Banking
Consumer Banking delivered good single digit income growth on
the first quarter of 2011.
Income continued to be broadly spread, with Deposit income
growing at a double digit rate, reflecting good volume growth and
improved margins. Credit Cards and Personal Loans performed well,
with double digit income growth year on year, as we selectively
grew our unsecured business, especially in Hong Kong, Singapore,
Malaysia, Taiwan and Korea.
Wealth Management income was in line with the strong first
quarter of 2011 and up on the run rate seen in the second half of
2011. Mortgage income was down on the first quarter of 2011 with
assets broadly stable on the year end position and continued margin
pressure.
SME performed well, with double digit income growth over the
comparable period in 2011, driven by Trade and Cash Management.
Expenses have been well controlled in the first quarter of 2012,
and were up on the comparable period in 2011 by a single digit
rate.
There has been growth on both sides of the balance sheet since
the year end, with a partial benefit from currency translation.
Liability margins in the first quarter increased on the year end
position, whilst asset margins were broadly flat on the level seen
during the second half of 2011.
Asset quality continues to be good within the Consumer Banking
business, reflecting our disciplined approach to risk management
and stable leading indicators. Loan impairment was, as expected,
higher than the run rate in the second half of 2011, by a mid
single digit rate, reflecting continued growth in the portfolio and
deliberate shifts in product mix.
Wholesale Banking
The Wholesale Banking business had a strong start to 2012 with
client income growing at a high single digit rate over the
comparable period in 2011. Client income continued to contribute
around 80 per cent of total Wholesale Banking income.
Commercial banking, by which we mean Cash, Trade and associated
FX, continues to be the core of our Wholesale Banking business and
performed well in the first quarter. Margins in Cash were broadly
stable and margins in Trade improved compared to the second half of
2011. Cash and Trade average balances continue to grow well,
however, the rate of growth in balances moderated compared to the
growth seen in 2011 due to a combination of reduced growth in
market activity, our stance on pricing and increased competition.
Transaction Banking income showed strong double digit growth over
the first quarter of 2011.
In Corporate Finance, income in the first quarter of 2012 was
marginally down on the very strong comparative period in 2011. The
deal pipeline remains robust.
Financial Markets client income showed high single digit income
growth over the first quarter of 2011. Compared to the second half
run rate of 2011 Financial Markets client income grew at a strong
double digit rate, with double digit growth in FX, Rates and
Credit. Volumes in the first quarter of 2012 were up on the
comparable period in 2011.
Own account income grew at a low double digit rate year on year.
Financial Markets own account income was down on the comparable
period in 2011, which was a very strong quarter. However, ALM and
Principal Finance income grew at a double digit rate.
Wholesale Banking expenses were marginally above the run rate
seen in the second half of 2011.
Whilst we continue to monitor closely a small number of
accounts, overall asset quality remains good. The loan impairment
charge in the first quarter was, as expected, very low.
Group
Overall, the Group had a strong start to the year, building on a
strong close to 2011, underpinned by continued momentum in the
balance sheet and well diversified income streams. The Group
remains very well capitalised and highly liquid. We look forward to
providing a further performance update in our pre-close trading
statement in June.
For further information, please contact:
James Hopkinson, Head of Investor Relations +44 (0)20 7885 7151
Ashia Razzaq, Head of Investor Relations, Asia +852 2820 3958
Jon Tracey, Head of Media Relations +44 (0)20 7885 7613
This announcement contains or incorporates by reference
'forward-looking statements' regarding the belief or current
expectations of Standard Chartered, the Directors and other members
of its senior management about the Company's businesses and the
transactions described in this announcement. Generally, words such
as "may", "could", "will", "expect", "intend", "estimate",
"anticipate", "believe", "plan", "seek", "continue" or similar
expressions identify forward-looking statements.
These forward-looking statements are not guarantees of future
performance. Rather, they are based on current views and
assumptions and involve known and unknown risks, uncertainties and
other factors, many of which are outside the control of the Company
and/or its Group and are difficult to predict, that may cause
actual results to differ materially from any future results or
developments expressed or implied from the forward-looking
statements. Such risks and uncertainties include changes in the
credit quality and the recoverability of loans and amounts due from
counterparties; changes in the Group's financial models
incorporating assumptions, judgments and estimates which may change
over time; risks relating to capital, capital management and
liquidity; risks arising out of legal and regulatory matters,
investigations and proceedings; the policies and actions of
regulatory authorities; the impact of tax; operational risks
inherent in the Group's business; risks arising out of the Group's
holding company structure; risks associated with the recruitment,
retention and development of senior management and other skilled
personnel; risks associated with business expansion and engaging in
acquisitions; global macroeconomic risks; risks arising out of the
dispersion of the Group's operations, the locations of its
businesses and the legal, political and economic environment in
such jurisdictions; competition; risks associated with the UK
Banking Act 2009 and other similar legislation or regulations;
changes in the credit ratings or outlook for the Group; market,
interest rate, commodity prices, equity price and other market
risk; foreign exchange risk; financial market volatility; systemic
risk in the banking industry and amongst other financial
institutions or corporate borrowers; cross-border country risk;
risks arising from operating in markets with less developed
judicial and dispute resolution systems; risks arising out of
regional hostilities, terrorist attacks, social unrest or natural
disasters and failure to generate sufficient level of profits and
cash flows to pay future dividends.
Any forward-looking statement contained in this announcement
based on past or current trends and/or activities of Standard
Chartered should not be taken as a representation that such trends
or activities will continue in the future. No statement in this
announcement is intended to be a profit forecast or to imply that
the earnings of the Company for the current year or future years
will necessarily match or exceed the historical or published
earnings of the Company.
Each forward-looking statement speaks only as of the date of the
particular statement. Save in respect of any requirement under
applicable law or regulation, Standard Chartered expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained
herein to reflect any change in Standard Chartered's expectations
with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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