Standard Chartered set for strong half

28th Jun 2010 07:07

Emerging markets-focused bank Standard Chartered is on course for a strong performance in the first half of 2010 as economic conditions in its markets improve.As at the end of May income and profit were ahead of the comparable period in 2009, excluding the gain of US$248m generated from the buyback of Tier 2 notes in April 2009. Income in the first six months is expected to be on a par with the corresponding period of last year but should show a double digit percentage growth from the second half of 2009.Consumer Banking income and Wholesale Banking client income are performing particularly well, but own account income has been weaker.Overall net interest margins are down a tad from 2009 levels and low liability margins have persisted longer than expected.On a year on year basis, cost growth will significantly exceed income growth for the first half of 2010, particularly in Wholesale Banking. This reflects the fact that in the first half of 2009 the company held back on investment and at the same time benefited from very strong own account income, whereas in the first half of 2010, whilst own account has weakened, the company has continued to invest.Loan impairment trends have been very good in both Consumer and Wholesale banking.On a divisional basis, Consumer Banking is contributing a higher proportion to group income and profit in the first five months of the year than in the comparable period in 2009, while Wholesale Banking income in the first half of 2010 is expected to be flat on the first half of 2009.