Standard Chartered off to a flyer

4th May 2010 07:20

Emerging markets focused bank Standard Chartered said it has made a very strong start to 2010, with income and profit both higher than in the first quarter of 2009.The group said there has been an improved balance between the two sides of the business with Consumer Banking playing catch-up on the Wholesale Banking arm.The Consumer Banking division saw income grow at a double-digit rate over the corresponding period of 2009, with underlying income ahead of the average run rate in the second half of 2009.The business is still facing margin headwinds and competitive pressures, however. Solid volume growth in mortgages has been more than offset by pressure on margins as the company responds to competitive threats, the group said. Current and savings account inflows have continued, but given the low interest rate environment liability margins remain tight.The division has seen strong growth in income from Small and Medium Enterprises (SME) while wealth management income remains on an uptrend across many regions, notably Hong Kong, Singapore and India.Asset quality in the division has improved on a year ago. "Delinquency indicators have continued to improve and the trend of incremental quarterly improvement in loan impairment has, as expected, accelerated," the company said.On the Wholesale Banking side the division kicked off 2010 with a record performance in client income, up 20% on the first quarter of 2009, and accounting for more than four-fifths of the division's total income.Expenses are ahead of the run rate seen in the first half of 2009 reflecting increased staff levels and the impact of investments made in the second half of last year. Consequently cost growth has outstripped income growth in the first quarter in the Wholesale Banking division.Overall the group said it has conserved a strong liquidity position with the assets/deposits ratio little changed from the year-end position.