Standard Chartered in excellent shape

4th Aug 2010 07:21

Impairment provisions were sharply lower at Asia-focused bank Standard Chartered in the first half of 2010 as pre-tax profit improved 10% year on year.Profit before taxation of $3,116m was up 10% from $2,838m in the corresponding period of 2009 but, as was the case for most performance metrics, the comparison with the second half of last year was much more flattering, with profits showing a 35% improvement from the $2,313m in the last six months of 2009.Impairment losses narrowed to $437m from $1,088m the year before. The challenging credit environment seen in early 2009 has continued to ease, resulting in lower delinquency trends since the second half of 2009 and consequent lower provisions, both at a specific and portfolio level.In line with market expectations operating income was modestly lower at $7,924m compared to $7,960m in the first half of last year, but was up 10% from $7,224m in the second half of 2009.Normalised income was up 3% at $7,908m from $7,704m the year before (H2 2009: $7,210m).Total assets climbed 17% to $481bn from $411bn a year earlier.The advances to deposits ratio eased to 76.2% from 78.4% at the end of June 2009 and 78.6% at the end of 2009.Core Tier 1 capital ratio of 9.0% was a marginal improvement on the 8.9% seen at the end of 2009 and materially better than the 7.6% seen at the halfway stage last year. "It is a matter of great concern to us, as a truly international bank, that regulations and taxes are not being introduced equivalently on an international basis and that UK banks could be put at a disadvantage to those elsewhere," said John Peace, chairman of Standard Chartered."The group has continued to perform strongly in the first half of 2010, despite increasing competition and tighter margins. We are investing for growth and Standard Chartered remains in excellent shape, with a strong and liquid balance sheet," Peace added.The interim dividend has been increased by 10% to 104.9 cents from 85 cents at the interim stage last year.