Resilient StanChart provides banking relief in H1 numbers

6th Aug 2013 10:56

Standard Chartered proved the benefit of its geographic diversity as it delivered a 3.2bn dollar pre-tax profit even despite a huge impairment from its Korean business. Although regulatory change in Seoul has led to a crumbling of banking sector profits in the country and a $1.0bn goodwill impairment for StanChart, the bank still beat analysts expectations on the bottom line.The FTSE 100 group reported normalised earnings per share of $1.219 for the first half of the year, beating consensus forecasts by around 5.0%. Despite a margin squeeze in many of its markets, the bank grew income from both consumers (CB) and wholesale customers (WB).CB income increased 7.0% to $3.7bn but operating profit fell 6.0% to $858m, while WB income increased 2.0% to $6.1bn and operating profit rose 7.0% to $3.2bn.The India, Africa and Hong Kong regions delivered the fastest growth, up 17%, 16% and 14% respectively, while Korea, Singapore and Other Asia Pacific offices lost ground. Group Chief Executive Peter Sands said: "Whilst some of our businesses have been slowed by economic turbulence or regulatory or policy interventions, our diversity means we can take such challenges in our stride and still deliver growth."He noted that costs were well controlled, credit quality remained good and the balance sheet was in "excellent shape" with ample liquity.Looking forward, management said income in both businesses accelerated in the second quarter, and the bank has entered the second half of the year with good momentum and we remain confident for the long term.Analyst Ian Gordon at Investec was enthused with revenue growth of 7.0% half-on-half, costs improved 3.0% and "insignificant" impairments. "STAN offers growth, value and yield - whatever you want, it's our top pick", he said, pointing to a price to earnings ratio based on full year earnings of "just 9.8" times which makes it "the cheapest UK bank".Shares in Standard Chartered were up 3.5% at 1,577 at 11:29 on Tuesday.OH