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StanChart issues alert

Under pressure

Mumbai, March 5: Standard Chartered Plc today cautioned that its performance during the first half could remain under pressure as emerging markets continued to face challenging conditions.

The London–based bank, which is focusing heavily on its operations in the emerging markets, came out with the grim forecast after announcing that its operating profits during 2013 fell 7 per cent to $6.96 billion from $7.52 billion in the previous year.

India is a key market for the bank and its pre-tax profits from its operations here rose 3 per cent to $697 million. Operating income grew to $1.70 billion, an increase of 7 per cent.

Operating income from the consumer banking business rose to $466 million ($440 million). Income from wholesale banking segment swelled to $1.23 billion from $1.15 billion last year.

Sunil Kaushal, regional CEO for India and South Asia, said the bank had shown robust growth in its Indian operations with an increase in both income and profits. He, however, added that though consumer banking profits exceeded $100 million for the first time, the bank had a cautious outlook for 2014 as the macro environment in India was likely to remain “somewhat challenging and uncertain”.

At the global level, group CEO Peter Sands said 2014 was likely to see a modest growth as markets and trading conditions were more volatile and difficult than a year ago.

“While current performance momentum is ahead of the second half of last year, performance in the first half of 2014 will remain challenged both at an income and profit level,” he said, adding that the bank was making changes to adapt to the new realities.

Hong Kong, Stanchart’s biggest market, saw income growing 11 per cent and operating profit rising around 16 per cent during 2013. The performance in 2013 was dragged largely by its South Korean operations, which saw a sharp fall in the performance of the consumer banking business because of elevated levels of impairment that rose 66 per cent even as income fell 12 per cent.

 
 
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