The Banking and Strategy Initiative

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Bank Results Season: Stanchart comes out on the other side

Stanchart paid $90m for sponsoring Liverpool in the Premier League

While Lloyds (41% state-owned) and RBS ( 83% state-owned) have already presented results Lloyds coming into the black. Barclays report further in the week, on 05th .

StanChart reduced impairments by $660 million to take profits for the six months to $3.12 billion, Operating/Pre Tax Margin staying at 33% despite a higher effective tax rate of 32.5%. Stanchart results will be updated after the afternoon conference bits fly in.but the Earnings of $1 per share seem to be a concern going forward as revenues stayed put at $7924 million and Indian IDRs raised its core Tier I Capital to a minimum 9% after the Basel III requirements, however StanChart may not have to change much but still an equivalent of this quarters $5-6 billion will be required again

Apart from its stake in Bohai Bank that has $25b in assets and 42 branches in mainland china, StanChart has also become a Cornerstone investor in AgBank with 320 million retail customers and 2.6 million corporate clients in China mostly SMEs. Stanchart has also grown its Corporate Finance advisory revenues 50% year on year for the six months ended June 2010, getting closer to $1bn in revenues. Profits from India alone are up 19% to $624 million making it a key proponent in StanChart, with Asia CEO also part of the Group Executive Board. Thats the largest market for Stanchart right now.

Retail Banking led contribution to Operating income at $2 billion from Net Interest Income another $1 billion added by unsecured lending ( cards and personal loans) while Investment Banking featured acquisitions in Oil and Gas Harrison Lovegrove. Equities ( Cazenove Asia ) and Africa (First Africa) India’s consumer Banking footprint is restricted to $250 million in Operating income and $94 million in Profits (working profits/segment profits) Non Interest Income in consumer banking led by wealth management fees also touched a veritable $1 billion

Wholesale Banking ex Investment Banking advisory continued to grow faster than retail as well, Overall Non Interest Income contributed 50% or $4 billion to the top line for the bank and the deal pipeline is robust going into 2011. Wholesale Banking contributed $5 billion with $760 million from India and <$700million from Hong-Kong. In wholesale banking some specialist business in trade finance was acquired in Singapore

stanChart is also progressive in adopting back Sports events for furthering the bank brand as lesser competitors drop the ball in the midst of the crisis

Banking, Europe, Bank results season


This entry was posted on August 4, 2010 by in Banking, China, CRR, Emerging Markets, Global, Home and away, India, Mergers etc and tagged , .


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