Standard Charted sees strong growth
( 2003-08-07 10:33) (China Daily)
Britain-based banking group Standard Chartered reported yesterday on robust profit growth for the first half of this year although its overall Hong Kong business deteriorated.
The group's pre-tax profit climbed 17 per cent year-on-year to US$741 million in the six months to June 30 mainly due to effective risk management and strong performance in wholesale banking.
The bank's charges for bad debts fell to US$308 million from US$407 million a year earlier. Its provisions for bankruptcies in Hong Kong fell 30.2 per cent to US$104 million, as a result of more cautious lending in the territory where personal bankruptcies have soared.
Meanwhile, Standard Chartered's Hong Kong business, which contributed 23 per cent trading profit to the group, recorded an 18 per cent drop in pre-tax profit as SARS led to lower consumer spending and higher unemployment.
But compared with the second half of 2002, the pre-tax profit for the first half rose 7 per cent, which represented an upwarding trend for the bank's performance in Hong Kong, said Peter Wong, director of Standard Chartered Bank.
"We expect the Hong Kong operation would post higher earnings in the second half," said Wong.
The decrease in Hong Kong business was mainly attributed to the bank's strategy of purposely contracting the issue of credit cards at a time of rising personal bankruptcies, he said.
But the bank will become aggressive again in credit-card business when positive credit data is shared among card providers, he noted.
Group Chief Executive Mervyn Davies also said: "We are well placed for renewed growth in credit-card revenues on the back of the positive credit bureau and the re-launching of our Manhattan card this month." So far, a total of 1.7 million Manhattan cards have been issued.
However, the bank warned that challenges remain in Hong Kong, where short-term pressures are considerable, particularly for consumer banking.
Kaikhushru Shiavaz Nargolwala, executive director of the bank, said the group would explore acquisition opportunities in Asia and the Middle East, but ruled out the speculation that it will make a purchase in Hong Kong.
The group has been in talks with several mainland banks on tie-ups, he said, and the group can extend its presence in the mainland market by organic growth and acquisitions.
It is also looking for locations for setting up back-up centres on the mainland, especially in Guangdong Province.
As one of its global expansion schemes, the bank announced yesterday it has increased its stake in KorAm Bank, the sixth largest bank in South Korea, to 9.76 per cent from 3.68 per cent, for a total cash consideration of US$154 million.
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