Compliance
Standard Chartered Chief Urges Caution On Banking Reform
As his London-listed bank reported pre-tax profits up 13 per cent to $5.1 billion on income up 9 per cent to $15.2 billion, Peter Sands, chief executive of Standard Chartered, has dismissed several current suggestions for the reform of international banking regulation, according to media reports.
While supporting changes insisting on higher levels of high-quality capital and improving liquidity, he thought other elements of proposed reform were “bad ideas”.
Any “variants of Glass-Steagal” (the separation of investment and retail banking) appear to Mr Sands “hugely distracting, costly and unlikely to make anyone or anything safer.” He emphasised a danger of “ending up with too safe a banking system relative to its ability to support growth.”
"Pre-funded resolution funds [bail-outs] seem equally unattractive, since they institutionalise moral hazard. Contingent capital [debt convertible to equity] looks remarkably like some of the overly complex derivatives that helped cause the crisis in the first place and which did not work in practice in the way they were supposed to in theory. I would argue for action, but deliberate, somewhat cautious action."
Total pay and bonuses rose by 4 per cent to $4.91 billion as the bank confirmed that Mr Sands planned to donate his £2.1 million (about $3.7 million) bonus to charity.
As reported by WealthBriefing yesterday, Standard Chartered said its consumer banking division, a unit which includes private banking, logged an operating profit of $867 million in 2009, falling from $1.116 billion a year before. Income in its wealth management arm fell.
The second half of 2009 saw more positive performance, the bank said in a statement today that gave few specific financial details on the results of its private banking arm. It said demand for wealth management products “continued to recover”.
Later, in a statement to WealthBriefing, The Standard Chartered Private Bank said: “We grew our client base by 25 per cent with client asset under management growing by 26 per cent in Asia and 12 per cent globally. The strong growth is mainly due to our advantaged business model where we are integrated into the Bank and our strong pan Asian presence.”