Best Year In Recent History For Standard Chartered

In a statement released by Standard Chartered on Tuesday, the company announced one of their best years in recent history and that they were well prepared to move through the changeable future of the banking sector.

It is still not known at this time, according to CEO Peter Sands, to what degree the economic deceleration and instability in the US would effect Stanchart’s future enterprises as they are yet to be impacted by the current crisis. Sands was quick to point out that the bank had indeed gone through multiple phases of difficult markets, and that they were in their best condition none the less.

Stanchart has announced an increase of revenues of 23% for 2007, which was highly benefited by expansive markets in Hong Kong, India and China. Due to this raise in funds and analysts positive short-term predictions for Stanchart, their shares are up 124p, nearly 8%, to £17.04. The bank had their best year ever last year, with pre-tax profits breaking through to $4bn (€2.7bn).

However the bank did lose $300m in the US subprime-related unrest, $133m of which was due to their interest in the structured investment group, Whistlejacket, who are now in receivership.

Only $6bn (1.8%) of Stanchart’s balance sheet is exposed to asset-backed securities and collateralised debt obligations.

The banks operating expenses have grown 30% each year for the last few years, which is faster than their actual income growth, however Sands assured that this was quite alright as the bank was establishing very profitable ventures in the economic expansive countries of China and India. However he did acknowledge that performance in South Korea was in need of considerable upward movement, which is the reason behind the management shuffle in that area.

According to Sands, Stanchart’s work as issuer of bank notes in Hong Kong was extremely significant to the bank. Though the Hong Kong Monetary Authority has stated that permission to issue the notes could be revoked if Temasek, a state-backed Singaporean investment group who are the largest shareholder in Stanchart, raised their portion of the bank over 20%.

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