Standard Chartered Says Has Delivered "Robust" Performance; Warns On Forex Shifts

Tom Burroughes Group Editor London 29 October 2013


Standard Chartered, the UK-listed banking group that earns a
large chunk of earnings in Asia, said it
delivered “resilient performance”, and expected to make low single-digit income
gains this year, while it warned that falls in emerging market currencies such
as the Indian rupee will affect results.

The interim statement for the third quarter contained no
hard financial numbers.

“The resilience of the third quarter performance was
underpinned by continued strong client activity despite a volatile market
environment.  The quarter started well
but slowed as usual in August.  The
difficult market conditions that arose in August also had an impact on
September,” Standard Chartered said in its

“As in the first half [of 2013], consumer banking has
continued to grow income at a mid single digit percentage for the year to date.
In wholesale banking, client income also grew at a mid single digit rate for
the year to date, with strong volumes offsetting a lower margin environment
than 2012. The key pressures on year to date performance are the ongoing
weakness in Own Account income and continued market uncertainty,” the firm

The bank said that since it published half-year results
earlier in 2013, global markets have witnessed developments such as falls in
several emerging market exchange rates, such as that of the Indian rupee and
Indonesian rupiah.

“Based on current rates, the full-year impact would be some $200
million on income and around $70 million on profits,” it said.

“Against this backdrop, the group overall has grown income
at a low single-digit rate year to date, with income in the quarter down by a
low single-digit percentage compared with the third quarter of 2012,” it said.

“Our income performance remains broad based by geography,
client segment and product. Hong Kong and Africa
have delivered strong performances and continue to grow income and profit at
double digit rates for the year to date. 
These strong performances have offset weaker performances in Korea and Singapore where income in both
markets declined by single digit percentages for the year to date,” the bank
continued. Standard Chartered said it expects a full-year, non-recurring tax
related cost in Korea
of $60 million.

Total impairment for the group in the third quarter was
below the first half run rate, at less than $300 million, although it was ahead
of the levels seen in the equivalent quarter of 2012 by some tens of millions
of dollars, the bank said.

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