Standard Chartered upbeat on profits

ASIA-focused bank Standard Chartered gave an upbeat outlook for its annual profits today. The UK-based group said it was winning market share and beating revenue expectations in consumer and wholesale banking.

The bank said it was 'very comfortable' with analysts' consensus forecast for a 15% rise in pre-tax profits to £1.78bn.

'The organic revenue momentum we have seen so far this year has surpassed our expectations, particularly in wholesale banking,' the bank added.

Standard Chartered's businesses are in Asia, where it makes about two-thirds of its profits, Africa and other emerging markets. The bank is targeting growing middle-class populations for consumer banking and is seeking better returns from its wholesale business for corporate customers.

'When they say they are very comfortable in meeting current profit expectations, most people would assume they mean they are quite likely to exceed expectations,' said SG Securities banking analyst Richard Staite.

'People are still prepared to pay a premium for a bank that can deliver organic revenue growth compared to domestic UK banks, which are expected to see a slowdown,' he added.

The bank's bad-debt performance had been 'very strong' due to increased risk management and benign market conditions, Standard Chartered said.

Wholesale banking revenue was boosted by increased demand for derivatives and advisory business, Standard Chartered said. The bank has built those businesses in recent years because they give better returns than simply lending money to companies.

The bank's shares picked upon the positive outlook statement and by mid-morning were up 2.2% at 891p.

Standard Chartered reports first-half results on 4 August.