/ 17 March 2009

Strong start to 2009 for Standard Chartered

British bank Standard Chartered has started the year ”very strongly”, but faces more challenges ahead as the world economy struggles through its worst downturn in decades, the company’s chief executive said on Tuesday.

Standard Chartered is the latest Western-based bank to reassure investors about its earnings amid the global financial turmoil.

Citigroup, Britain’s Barclays and others have offered similar upbeat assessments in recent days.

”We’ve started the year very strongly,” CEO Peter Sands told reporters in Hong Kong.

Sands said the bank was ”very comfortable” with its capital position. At the end of last year, Standard Chartered raised $1,8-billion in a rights issue. Its Tier-1 capital ratio — the most widely used measure of a bank’s solvency — stands at just more than 10%.

”I would never rule out raising more capital, but we are very comfortable with our capital position,” Sands said.

Still, rising unemployment in its key markets could weigh on the bank, he said. The bank could continue to suffer deterioration in its loan book for the first quarter, but the losses were expected to be less than in the fourth quarter.

The company has no plans to cut jobs, Sand said, though he wouldn’t offer a detailed financial outlook for the year.

Standard Chartered focuses on emerging markets and derives nearly all its revenues from Asia, the Middle East and Africa.

The bank would consider acquisitions as it looks to grow in those markets, Sands said, although he added the bank preferred to expand organically rather than by purchasing other companies.

Last week, the company reported a 17% rise in profits for 2008, driven by growth in wholesale banking.

For the year ending December 31, Standard Chartered reported a profit of $3,3-billion, up from $2,8-billion in 2007. Operating income rose 26% to $13,97-billion and total assets rose 32% to $435-billion.

The bank’s shares fell 0,2% to $93,5 in Hong Kong trade. — Sapa-AP