Record earnings posted at Standard Chartered

STANDARD CHARTERED notched up a ninth consecutive year of record earnings in 2011 on the back of buoyant growth in Hong Kong and Singapore, although rising competition for staff pushed up its wages bill.

London-based Standard Chartered, which makes more than three-quarters of its profit in Asia, said strong growth in investment and retail banking arms absorbed a 15 per cent rise in staff costs and a fall in profit in two of its biggest markets, India and Korea.

Underlying wage inflation was 5.5 per cent as the bank competed to hire and retain staff, notably in China and India, where inflation was over 10 per cent. The bank said it expects wage inflation to ease back to 3-4 per cent this year.

“Yes, we are facing acute competition for talent, but we are still managing to invest and keep a tight grip on costs,” said chief executive Peter Sands.

He said the bank paid about £800 million (€955 million) in bonuses to staff for last year, similar to 2010.

Mr Sands will get a $3.5 million bonus and $1.5 million salary for last year, both unchanged from 2010.

“Growth momentum will likely accelerate in 2012,” said Dominic Chan, an analyst at BNP Paribas in Hong Kong. “Key markets such as India are showing signs of improving, and the bank is well placed to gain market share in areas such as trade finance and wholesale banking.”

Its London-listed shares were up 1.7 per cent at £16.49 yesterday, in line with a firmer bank sector index. StanChart reported a 2011 pretax profit of $6.8 billion, up 11 per cent from $6.1 billion a year earlier and in line with the average forecast from analysts.

Mr Sands and analysts said the results beat forecasts after stripping out a bigger than expected charge of $206 million for the Korean staff retirement plan.

Southeast Asian city-state Singapore was the star performer and became the third of its markets to deliver more than $1 billion in profit. Revenues there rose 26 per cent, while operating profit jumped 40 per cent.

Hong Kong remains its biggest market, with profits up 41 per cent at $1.5 billion, and seen as the focus of plans to benefit from the internationalisation of China’s yuan currency. – (Reuters)