Chillin' out till it needs to be funded
HSBC’s fastest groing markets mandate and StanChart’s Emerging Markets prince characterisation remains but even for Stanchart, growing markets have changed since they pressed forward in 2009 thinking of their home advantage to push thru. India in particula and marketso utside MENA (Middle East and Africa) have not really shown growth since, though China has been a welcome island that has pushed the case.
Net Profits for the first 6 months of 2011 have crossed the rubicon of performance by having actually grown but are yet only $2.8B for 6 months from $2.5B just June 2011. REvenue growth is in single digits at $9.5B and Deposits of $360B with Loan and Advances still $279B yet creditable for a bank its size.
CAR is up to 17% and Tier I is still 11.6% showing a possibility of growth in lending book thtat has not seemingly come about in along time now EPS of 116.6 Cents is INR1,5 approx for each IDR for Capital raised in India Stanchart’s houseviews on EM growth also stress a US breakdown though that has not fructified and the bank should probably look at entering that market instead of its home base in Europe. Branch netork in China has caught up with India’s at 90 branches each an Africa boasts of 180 branches in 14 countries
While HSBC has a dominant share of the new China trade market, SCB has made a dent ith dominant presence in Africa cornering the trade with that continent (from China) the earings report quoting Nigeria Ghana and Subsaharan Africa It also grew retail in China by 56% in Offshore assets, hile Wholesale Banking grew 25% and groth in retail engendered a 31% groth in “high value segments” ( likely to be defined at the 9-30 am conference)
The Bank’s NII was just under $5.5 B for the 6 months. The bank does not report financials in its quarterly earnigns reports. Trading Income for the half year is $1.56B and Fee based almost $2 B showing the preponderence of trade strengths and groing its Transaction Banking
NIMs are the lowest in the family of global banks at 2.3%
Operating Expenses grew just 5%. Consumer Banking income is more or less stable at $3.5B with $674 m from HK and $480 M from Singapore, India falling behind further to $223M. Cards and Loans grew in double digits to $1.29B China is just $135m and Korea $588m in retail incl liabilities. Profits from Indian ops increased 22% to $48 m even as PIL margins compressed
Wholesale Banking Income grew hard and fast in Hongkong and Korea to $1.014 B and $362 M, while India, Singapore and Middle East & So Asia came in at between $600m to $750m. Segment wise TRansaction Banking Income has risen 20% to $1.8B and Trading less than 10% to $3.7B, growing in rates trading RMB and China trade income accrued to Hongkong’s $1.014 B in WB
Interbank lending is up almost 30% in the Balance Sheet(EOP) to $74 B and Derivatives on Balance Sheet up 22% to $61B. Deposits from Banks and Derivatives Liabilities have also grown 20%
Derivatives positions unrealised have dropped from $68 B and of the $62 B , $25 B are not covered by Netting Agreements, a little surprising..