Standard Chartered banks £3.5bn profit

ASIAN-facing Standard Chartered brought down the curtain on the UK banks’ results reporting season yesterday with its seventh consecutive year of record figures.

The group unveiled a 13 per cent rise in 2009 profits to $5.2 billion (3.5bn) against $4.6bn in 2008.

Standard – London-based but with the lion’s share of its operations historically in Asia – revealed that it was paying 750 million in bonuses for last year’s performance, with 39m earmarked for the Treasury under Chancellor Alistair Darling’s bonus tax.

Most of the bonus pool will benefit overseas workers in regions such as Asia and Africa, as the bank only has 2,000 of its 75,000 staff in the UK.

Standard, which has signed a deal to sponsor English premiership football club Liverpool, acknowledged the furore over bonuses but defended them as it claimed that competition for employee talent was “both international and red hot”. The bank said it took a “global perspective” on pay policy, while its proportion of revenues paid out in bonuses had fallen for the past two years.

Standard chief executive Peter Sands also warned against over-regulating the sector and starving the economy of credit.

He said: “We should also accept that, however good the rules, they will not make up for poor management or supervision.”

Despite a 51 per cent rise in bad debts to $2bn, the group enjoyed strong momentum in its investment banking business.

Standard said it now had five major markets producing income of more than $1bn, and said that 2010 had started well for the business.

Shares in Standard Chartered closed up 5 per cent, or 84p, at 1,674p yesterday.

Richard Hunter, head of UK equities at stockbroker Hargreaves Lansdown, called the company the “unsung hero” among UK banks. He added: “In particular, the performance of the investment banking unit was more than sufficient to cover the rising level of impairments.”