Standard record continues despite regulatory burden

By MARTIN FLANAGAN
Published on 06/03/2013 00:10

ASIA-focused bank Standard Chartered yesterday posted its tenth consecutive year of record profits but warned that extra regulations were costing it $500 million (£330m) a year.

Profits edged up by 1 per cent to $6.9 billion and the lender 
expects a further rise in its surplus during the year ahead.

But chief executive Peter Sands said a “multitude of regulatory headwinds” were hurting the bank and said the burden could rise as high as $800m.

Sands is also worried by the European Union’s (EU’s) proposed cap on bankers’ bonuses. He said: “We are a global bank and 97 per cent of our staff are outside the EU and we’re concerned about our ability to be competitive in attracting and retaining talent.”

The bank hired more than 2,000 staff last year and said it could expand the headcount by a similar amount in 2013.

The FTSE 100 constituent’s 
activities in China and its African wholesale banking unit broke the $1bn of income milestone.

The bank also revealed it cut its 2011 bonus pool by 7 per cent to $1.43bn after its $667m fine from United States regulators for breaching sanctions on doing business with Iran.

But the lender still raised its full-year dividend by 10.5 per cent to 84 cents (56p).

Marc Kimsey, a trader at Accendo Markets, compared Standard’s “solid, reliable” performance to “an old Volvo estate car”.

He added: “Steady consumer banking income, China and Africa chipping in with over $1bn of income, dividend increased by 10 per cent – a proper update from a proper bank. A refreshing report following the horror shows from RBS and Lloyds.”

Simon Maughan, an analyst at Olivetree Securities, added: “Given the events of the past year, it’s quite a feat to deliver a good set of boring results.”