Standard Chartered eyes 10% growth

Standard Chartered said it expected to grow income by 10 per cent or more this year even though growth dipped below that pace…

Standard Chartered said it expected to grow income by 10 per cent or more this year even though growth dipped below that pace in the first quarter due to weakness in India and the strength of the US dollar against Asian currencies.

The Asia-focused bank said operating profit was up more than 10 per cent in the first quarter as it kept a tight grip on costs, and said it expects to add about 2,000 staff during the year as it picks up the pace of its investment.

"We have real momentum and we have significant investment capacity, so we will accelerate investment over and above what we budgeted," said finance director Richard Meddings.

The bank expects to open its 100th branch in China this year - it now has 86, making it the third-biggest foreign bank in the country, after HSBC and Bank of East Asia.

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Wages in the bank's main markets continue to rise, but after a spike in inflation last year - when the underlying rise in wages was 5.5 per cent, and more than 10 per cent in hot markets like China and India – Mr Meddings said the increase was "somewhat abating".

It kept its staffing level at around 87,000 in the first quarter, but should add about 2,000 jobs by the end of 2012, in its technology operational hubs and China sales force, he said.

London-based Standard Chartered, which gets about four-fifths of its income in Asia, earns much of that in local currencies, which translates to fewer dollars when the US currency strengthens.

Mr Meddings said the currency impact should ease in the second half of the year, although he said tougher regulations also remained a drag on revenue growth.

Standard Chartered said it saw strong first-quarter growth in Hong Kong, Malaysia, Indonesia and China.

Its India business continues to suffer from depressed business confidence, although Mr Meddings said he expected income there to rise by "single digit percent" this year after slumping by a third last year.

Growth in expenses came in below income growth in the first quarter and cost/income growth should be in line for 2012.

The bank reported most difficulty in areas such as corporate finance that have been tough for the industry as a whole.

Standard Chartered does not publish full quarterly numbers, only issuing commentary on performance.

It notched up a ninth consecutive year of record earnings in 2011 on the back of buoyant growth in Hong Kong and Singapore. It is expected to stretch that to a 10th year, with profits expected to hit $7.5 billion, up 10 per cent. Mr Meddings said he was comfortable with the consensus forecast.