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KANIS LI

Standard Chartered said its income and operating profit recorded low single-digit growth in the first nine months of the year on souring credit quality at its South Korean business and currency depreciation in emerging markets.
Income for the third quarter edged down by a low single-digit percentage from last year, the bank said in its interim management statement yesterday, without giving specific figures.
Impairment charges for the quarter fell to below US$300 million from the first half but remained millions of dollars higher than last year.
The Asian-focused British lender had concentrated on Korea last year to avoid further erosion of credit quality but there was still a long way to go.
"It will take two to three years to get the Korea business into the shape we want," Standard Chartered's finance director Richard Meddings told a conference call yesterday.
The bank was actively shrinking the consumer banking business in Korea and had tightened the underwriting criteria for unsecured lending, Meddings said.
The performance of the Korean business continued to have a material impact on the bank and dragged down the consumer banking arm with "a mid single-digit percentage" fall in its operating profit in the nine months. It also expected a one-off tax-related cost of about US$60 million.
But the operating profit of the wholesale banking arm rose by a low single-digit percentage.
According to Bloomberg, analysts gave a consensus forecast of US$7.47 billion for the bank's pre-tax profit in the year, up 8.6 per cent from last year on the reported basis.
But Maybank Kim Eng Securities analyst Steven Chan said he expected the bank to miss the market consensus. "The bank could not achieve a high single-digit rate of growth in the first three quarters," he said. "The Korea and India businesses are not performing well, and its own investments are also not in a good shape."
Staff streamlining had continued since the second quarter and the bank had 2,000 fewer employers in the third quarter than a year ago, Meddings said.
Falling currencies, including the Indian rupee and the Indonesian rupiah, were estimated to have shaved US$70 million off profits for the whole year.
Hong Kong and Africa continued with the strong performance by reporting double-digit growth rates in income and profit for the first nine months.


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Operating profit at Standard Chartered's South Korean consumer banking arm fell by a mid-single-digit percentage. Photo: Reuters

Business

Banking & Finance

Standard Chartered said its income and operating profit recorded low single-digit growth in the first nine months of the year on souring credit quality at its South Korean business and currency depreciation in emerging markets.
