Standard Chartered announces profit, share placing
LONDON — Standard Chartered PLC reported Tuesday that first-half profit rose 5.5 percent compared with a year ago even as provisions for bad loans more than doubled to more than a billion dollars.
The bank also announced a share placing to raise about 1 billion pounds ($1.7 billion) to support expansion in key markets in Asia, Africa and the Middle East. The placing comes six months after Standard Chartered raised $2.68 billion from a rights issue.
The bank said net profit was $1.88 billion compared with $1.79 billion in the first half of last year. It raised its interim dividend to 21.23 cents.
“We interpret the combination of a 1 billion pounds placing with a 10 percent interim dividend hike as a sign of management’s confidence,” said Sandy Chen, analyst at Panmure Gordon & Co.
However, Chen said, the combination “begs questions about what management is trying to signal.”
Standard Chartered said it achieved a record half-year operating profit of $2.8 billion, up 10 percent from a year earlier.
Provisions for losses on bad loans rose to $1.088 billion, up 133 percent from $465 million in the first half of 2008.
Standard Chartered shares closed down 7.5 percent at 1,328 pence on the London Stock Exchange. Monday’s closing price of 1,434 pence had been the highest for the bank since Sept. 25.
“The early dip in the share price, given the announcement of a further 1 billion pounds fundraising exercise, masks another set of extremely robust numbers from Standard,” said Richard Hunter, analyst at Hargreaves Lansdown Stockbrokers.
Standard Chartered said profit from wholesale banking rose 37 percent, offsetting poor results in some countries: profit in Korea fell 61 percent, partly due to the depreciation of the won; profit in the Middle East and South Asia fell 43 percent.
Nonetheless, Chief Executive Peter Sands said there were opportunities which Standard Chartered could seize with new funding.
“We have learned the power of playing from strength,” Sands said. “More capital will also enable us to take full advantage of the opportunities emerging from the crisis. Asia will emerge faster than the rest of the world.”
On the Net: investors.standardchartered.com
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