Standard Chartered aided by Asian rally
STANDARD Chartered yesterday raised $1.7bn (£1.02bn) in a share sale after reporting a 10 per cent jump in pre-tax profits for the first six months of the year.
Pre-tax operating profit reached $2.84bn, beating the $2.59bn booked in the first half of 2008 and well ahead of an analysts’ consensus forecast provided by the bank of $2.49bn.
Revenues were up 14 per cent from $6.99bn to $7.96bn as the Asia-focused bank benefited from increased client trading volumes and wide bid-offer spreads due to the rally in Asian stock markets.
Standard Chartered is also in negotiations to buy businesses in India and China from RBS Asia for a sum in the low hundred millions, although a bank spokesman would not confirm the details of the transaction.
Chief financial officer Richard Meddings told City PM that the $1.7bn raised from the share sale was “categorically not a war chest” targeted at making acquisitions.
“We will look at acquisitions but it will be in support of our strategy, not a strategy in itself, and will be very disciplined.”
Meddings said a 36 per cent surge in wholesale banking operating profit, to $2.25bn, was down to the bank building deeper relationships with existing clients as rivals dropped out of the market place.
“We’re not in the business of giving competitors the opportunity to get market share back,” he said.
The strong performance in wholesale banking more than offset a 57 per cent decline in retail income, which fell to $348m.
Chief executive Peter Sands said consumer banking was beginning to stabilise after a “tough” twelve months, pointing to two successive quarters of rising income and stabilising loan impairment.
Group-wide, impairment was up from $465m in the first half of 2008 to $1.09bn, largely due to two projects in the Middle East and derivative losses in South Korea.
The dividend was hiked 10 per cent to $21.23.
STANDARD CHARTERED’S SHARE SALE
UBS AND JPMORGAN CAZENOVE
UBS and JPMorgan Cazenove managed yesterday’s successful share sale for Standard Chartered, raising $1.7bn (£1.02bn) by selling shares at 1,360p each.
The team at JPMorgan Cazenove, the broker led by chief executive Naguib Kheraj (left), was headed up by Jonathan Wilcox, a managing director in equity capital markets.
At UBS, Tim Waddell, the co-head of UK investment banking, led the bank’s management of the share sale.
He was backed up by Chris Fox of the bank’s financial institutions group, while Sam Kendall, a managing director in global capital markets, handled the book-building process.
Standard Chartered, which raised £1.8bn in a rights offer just nine months ago, said it would use the money to fund expansion in Asia and boost its capital strength.
UBS and JPMorgan Cazenove have been Standard Chartered’s first choice to manage rights issues over the past decade.