StanChart settles for slower growth

Asia-focused British lender Standard Chartered has come to terms with the prospect of high single-digit income growth rates in the next few years, down from the double-digit rates of the past, due to the global economic slowdown and uncertainties about regulatory requirements on capital and liquidity.

The tightening of underwriting criteria in India and the scaling down of its consumer business in South Korea had hit growth, executives said yesterday, and the bank would now focus on parts of consumer banking and unsecured lending.

Following in the cost-cutting footsteps of rival HSBC, Standard Chartered said it would also focus on areas that could offer higher profitability and growth, and cut back in others or quit them altogether.

After previously targeting a neutral jaws ratio - with income growth in line with increases in costs - it is now targeting higher income growth.

"We continue to believe in the potential of our markets and our competitive advantage but we are facing headwinds," finance director Richard Meddings told analysts and investors in London yesterday.

Chief executive Peter Sands said increasing competition among lenders operating either locally or regionally was also putting pressure on the group. "We will not hit double-digit [income growth] this year," he said.