Interim Management Statement

RNS Number : 2981U

Standard Chartered PLC

13 October 2010

 



Standard Chartered PLC

Interim Management Statement

13 October 2010

Standard Chartered today releases its Interim Management Statement (IMS) for the third quarter of 2010.  

Following on from the very strong first half performance, which included record profits, Standard Chartered has continued to make very good progress in the third quarter of 2010. 

Business performance in the third quarter has been very strong, characterised by trends similar to those seen in the first half, including strong levels of client and customer activity.  Income in the third quarter of the year was above the first half run rate and the Group continues to show good momentum despite competition remaining strong.  Costs are well controlled and loan impairment continues to improve. 

Commenting on third quarter trading, Peter Sands, Group Chief Executive of Standard Chartered said;

"Standard Chartered has delivered another strong performance, with record levels of income and of profits to the end of September.  Business activity levels across our markets are continuing to increase, with trade volumes almost back to pre-crisis levels.  Standard Chartered is benefiting from these trends and continues to be well placed to service the needs of its clients and customers. "

Wholesale Banking

The Wholesale Banking business has continued to deliver a strong and broad-based income performance. Client income remains the key driver of growth and accounts for around 80 per cent of total Wholesale Banking income, with high teens growth for the first 9 months of 2010 on the comparable period last year.

Transaction Banking remains strong with income ahead of the run rate in the first half and with continuing growth in average volumes in both Trade and cash.  Trade and cash margins have remained stable during the third quarter.

Financial Markets volumes have shown strong year on year growth albeit

against the backdrop of tighter spreads; Financial Markets client income has shown double digit income growth year to date compared to the same period last year.  Corporate Finance also continues to perform well and maintains a strong deal pipeline. 

Own account income is higher than the first half run rate.   Principal Finance has made a number of good realisations and Financial Markets had a good quarter despite a subdued trading environment.  This was partially offset by slightly lower ALM accruals in the third quarter. 

Expenses in the Wholesale Banking business remain well controlled, allowing for a continued investment programme, with third quarter run rates ahead of the first half.

Credit quality in the Wholesale Banking portfolio remains good. 'Early alert' indicators have continued to improve throughout 2010 and are not showing any particular concentration by geography or industry.  The loan impairment charge in the third quarter was, as expected, low.

Overall growth in Risk Weighted Assets in the third quarter has been in line with expectations.

Consumer Banking

Income momentum in Consumer Banking continues to progress with third quarter income ahead of the run rate for the first half of the year.  Year to date income has grown at broadly the same rate as in the first half of the year.

Mortgage income has fallen slightly in the third quarter over the first half run rate, with good volume growth more than offset by continued margin pressure.  Liability margins have broadly stabilised and are at similar levels to those seen at the half year. 

Wealth Management fees, SME, and Credit Cards and Personal Loans are all showing an improving trend with income in the third quarter ahead of the first half run rates. 

We continue to be disciplined in managing the cost base and have selectively invested to underpin income momentum, particularly in marketing and in hiring Relationship Managers.

Portfolio credit quality in Consumer Banking is good. The third quarter loan impairment charge has continued to fall and was below the run rate seen in the second quarter of the year.

Group

Standard Chartered continues to focus on maintaining balance sheet strength.  It remains liquid and well capitalised with a conservative, diverse balance sheet, well spread by geography, asset type and industry.

The Group's liquidity position remains strong.  We saw a continuing inflow of customer deposits during the third quarter, in particular current and savings accounts, and we are continuing to win cash mandates in Wholesale Banking.

We are well capitalised and capital ratios, at Core Tier 1, Tier 1 and Total level are, as in prior periods, strong under the current Basel II regime.

We have very limited levels of refinancing maturing in the next few years.  

We look forward to providing a further update in early December in the preclose trading statement.

For further information, please contact:

Stephen Atkinson, Head of Investor Relations                       [phone]

Ashia Razzaq, Head of Investor Relations, Asia                    [phone]

Jon Tracey, Head of Media Relations                                     [phone]

This announcement contains 'forward-looking statements' regarding the belief or current expectations of Standard Chartered, the Directors and other members of its senior management about the Group's businesses and the transactions described in this announcement. Generally, words such as "may", "could", "will", "expect", "intend", "estimate", "anticipate", "believe", "plan", "seek", "continue" or similar expressions identify forward-looking statements. These forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Group and are difficult to predict, that may cause actual results to differ materially from any future results or developments expressed or implied from the forward-looking statements. Such risks and uncertainties include changes in the credit quality and the recoverability of loans and amounts due from counterparties; changes in the Group's financial models incorporating assumptions, judgments and estimates which may change over time; risks relating to capital, capital management and liquidity; risks associated with the implementation of Basel III and uncertainty over the timing and scope of regulatory changes in the various jurisdictions in which the Group operates; risks arising out of legal and regulatory matters, investigations and proceedings; operational risks inherent in the Group's business; risks arising out of the Group's holding company structure; risks associated with the recruitment, retention and development of senior management and other skilled personnel; risks associated with business expansion and engaging in acquisitions; reputational risk; pension risk; global macroeconomic risks; risks arising out of the dispersion of the Group's operations, the locations of its businesses and the legal, political and economic environment in such jurisdictions; competition; risks associated with the UK Banking Act 2009 and other similar legislation or regulations; changes in the credit ratings or outlook for the Group; market, interest rate, commodity price, equity price and other market risks; foreign exchange risk; financial market volatility; systemic risk in the banking industry and amongst other financial institutions or corporate borrowers; cross-border country risk; risks arising from operating in markets with less developed judicial and dispute resolution systems; risks arising out of hostilities, terrorist attacks, social unrest or natural disasters; failure to generate sufficient level of profits and cash flows to pay future dividends. Any forward-looking statement contained in this announcement based on past or current trends and/or activities of Standard Chartered should not be taken as a representation that such trends or activities will continue in the future. No statement in this announcement is intended to be a profit forecast or to imply that the earnings of the Company for the current year or future years will necessarily match or exceed the historical or published earnings of the Company. Each forward-looking statement speaks only as of the date of the particular statement. Except as required by the Listing Rules, the Disclosure and Transparency Rules, the Prospectus Rules, the London Stock Exchange or otherwise by law, Standard Chartered expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Standard Chartered's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

 

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