The banking group reported a small pre-tax loss for the first six months of the year.

Standard Chartered, the UK-listed bank earning the lion’s share of its business in Asia and Africa, yesterday said its private banking business logged a pre-tax loss of $5 million in the six months to 30 June this year, widening from a loss of $1.0 million a year earlier. Income rose but higher costs pushed the number into the red. 

Among other details about the private bank, StanChart said underlying income of $271 million rose by 12 per cent, with wealth management and retail products rising 18 per cent and 3 per cent respectively. Assets under management increased by $5 billion or 8 per cent driven by positive market movements, and $1.6 billion of net new money came through the door.

For the lender as a whole, however, it logged an underlying pre-tax profit of $2.356 billion for the first six months of 2018, up from $1.919 billion a year ago and from $1.091 billion in the previous six-month period.

Around early-afternoon yesterday shares in the bank were down 0.89 per cent, at 690 pence per share, and have fallen about 11 per cent since the start of January, 2018. 

The bank, along with a number of its peers, has faced rising compliance costs, and is battling in markets such as Asia to carve business from the region’s rising number of mass-affluent and high net worth individuals. Fortunes of the bank have waxed and waned amid changing fortunes of emerging markets, to which it has a high exposure.

The bank’s cost/income ratio widened slightly over the 12 months to 66.9 per cent from 66 per cent a year earlier, it said in a statement yesterday. On a statutory basis, pre-tax profit attributable to ordinary shareholders stood at $1.343 billion, from $971 million a year earlier.

“Our improved performance was delivered against a backdrop of continued global economic growth, with strong trade flows and investments and US interest rates continuing to normalise. However, the global expansion is becoming more uneven and while some geopolitical concerns have receded, others have increased, particularly surrounding the trading relationship between the US and China,” José Viñals, group chairman, said. 

He went on to note that while the bank has strong links to China he did not expect recent protectionist actions by the US against the Asian giant to affect the bank considerably. 

“Given our history and purpose - to drive commerce and prosperity through our unique diversity - we believe that trade protectionism would be bad for the global economy. It is, however, worth noting that although the income we make from China's many trade corridors is important for the group, our priorities are those radiating from China in Asia, and along the Belt and Road Initiative routes connecting China with our markets in Africa and the Middle East. As a result, our direct exposure to the risks of US-China trade tensions is limited; we generate far more income financing commerce between China and other markets in our footprint - meaning we stand to benefit over time if that were to increase - than we do on trade between China and the US,” he added.

Appointment
Also, Standard Chartered Bank has appointed Tracey McDermott as group head of compliance, subject to regulatory approval. This is in addition to her role as group head of corporate affairs and brand and marketing.

Mark Smith, group chief risk officer, will jointly lead the risk and compliance operations with McDermott. They will both represent risk and compliance respectively on the bank’s management team and continue to report to Bill Winters, chief executive.

McDermott was interim group head of compliance, and has taken over the role full time from Neil Barry, who left the UK-listed bank after a disciplinary probe discovered his behaviour to be “inappropriate.”, as reported by this publication in June.