The New Nation - Internet Edition

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BUSINESS REPORT

Standard Chartered PLC on Wednesday delivered another record performance for the first half year ended June 30, 2008 with operating profit before tax (OPBT) rising 31 per cent to US$2.59 billion and operating income increasing 33 per cent to US$6.99 billion. Normalised earnings per share increased 19.6 per cent to 120.4 cents. The Board on Wednesday declared an interim dividend of 25.67 cents per share, up 11 per cent.

Growth in underlying income accelerated to 28 per cent, up from 23 per cent in 2007. The performance was a result of the disciplined investments made in its core markets over the last few years with 85 per cent of the operating income growth now coming from organic businesses. Both Wholesale and Consumer Banking businesses showed strong income momentum delivering over $3 billion of revenue each.

Peter Sands, Group Chief Executive, said: "I am very proud of what we have achieved in terms of both financial performance and strategic progress, despite the turmoil in financial markets. The Bank is in great shape-we are strongly positioned to weather the economic uncertainties and superbly placed to capture opportunities."

Most of the key markets in the Standard Chartered network delivered strong performance. Hong Kong, the Group's largest market, increased pre-tax profits by 28 per cent; India, now the second largest market, by 89 per cent; Singapore by 55 per cent; Africa by 41 per cent; and UAE 65 per cent. Seven of the nine markets delivered pre-tax profit growth in excess of 25 per cent, and four at over 40 per cent.

The Group's key markets in Asia continued to enjoy robust economic growth underpinned by resilient domestic demand and increased intra-regional trade flows. The African economies continued to leverage off Asian economic growth and commodity demand, while the Middle East region continued to benefit from the high oil price and ample liquidity.

Wholesale Banking delivered an outstanding performance with pre-tax profit jumping 38 per cent. A feature of these results is the breadth and diversity of the Wholesale Banking business, which whether viewed by product, by customer segment or by geography, is firing on all cylinders. The deal pipeline was strong as the Bank entered the second half. The number of clients generating over $5 million income increased by 60 per cent in the first half.

Consumer Banking delivered good income growth of 15 per cent while expenses grew 22 per cent, reflecting the Bank's strong investment programme in the franchise, resulting in pre-tax profit rising two per cent. Underlying double digit income growth of 10 per cent was underpinned by continued strong growth in SME and Wealth Management.

Richard Meddings, Group Director Finance, said: "These results reflect the benefits of the significant investments we have made in our key markets and businesses in recent years, together with the value of a clear and consistent strategy.

Our growth is broad-based, not concentrated on one region or business, and we have shown great resilience in uncertain times."

The Bank's capital and liquidity position remained strong with Tier I capital at the top end of the target range at 8.5 per cent and total capital at 14.9 per cent. Almost 23 per cent of the balance sheet was held in liquid assets, and the Bank was a net lender in the inter bank market as at June 30.

The acquisition of American Express Bank was completed earlier in February and 24 of the 48 markets were legally amalgamated in the first half. The Bank is on course to deliver in excess of the $100 million a year of cost savings we had initially expected, and double digit return on investment by 2009.