Standard Chartered warns on costs

9th Dec 2010 07:15

Asia-focused bank Standard Chartered says it is on course for another record year of profit and income as it continues winning market share, but the cheer was tempered by a warning on costs.The company said that both its wholesale and consumer banking businesses have seen strong income levels, though net interest margins have fallen fractionally from levels of 2009 due to pressure on asset margins in several products.Cost growth is expected to exceed income growth as the bank invests in both its businesses, opening new branches, hiring new staff and investing in the brand. Increasing competition for staff and higher compliance and regulatory costs have also been exerting upward pressure, the bank says.Loan impairment levels are falling in both businesses, said Standard Chartered, which anticipates double-digit pre-tax profit growth in consumer and wholesale banking. The balance sheet is 'well diversified and conservative', liquidity remains strong and deposits have been growing well in both businesses, it says.'We have invested throughout the year to underpin future momentum in 2011 and beyond,' said chief executive Peter Sands. 'We are taking market share and continue to be advantaged by our deep relationships, our network and a diverse, liquid and well capitalised balance sheet.'