Standard Chartered's H1 net profit up 8.4%

Wednesday 06 August 2014 12.31
Standard Chartered faces new US fines over alleged breaches of money-laundering regulations
Standard Chartered faces new US fines over alleged breaches of money-laundering regulations

Standard Chartered's year-on-year profit for the first half of 2014 was up slightly at 8.4%, but it confirmed it faces fresh US fines over alleged breaches of money-laundering regulations. 

Net profit stood at $2.31 billion for the six months ending June 30, up from $2.13 billion the same time last year.

But the London-based and Asia-focused bank saw increasing losses on loans and a weak financial market affect its operations. 

The bank's profit before tax was down 20% at $3.27 billion from $4.09 billion last year, with impairment losses on loans rising to $846m from $730m last year. 

Operating income fell almost 5% to $9.27 billion from $9.75 billion in the previous year. 

"Our performance in the first half of 2014 is clearly disappointing. It is not what we strive for and not what our investors expect," the group's chief executive Peter Sands said in the filing. 

Sands cited continued weakness of the financial markets and the bank's challenges in Korea as major reasons for the weak performance. 

"We have completely reorganised the group, made a number of disposals, re-worked our segment strategies, and redirected capital and investment spend," Sands said of the first half, adding that 2014 will be a "challenging" year. 

The company said it saw a loss of $126m before taxation for Korea where the bank announced the sale of its consumer finance and savings bank businesses. 

"Turning this business around will take time and a lot of work on multiple fronts, not least because the industry as a whole faces huge challenges," Sands said. 

The southern Chinese city of Hong Kong was the bank's most profitable market where it saw a profit of $900m before taxation for the period, followed by Singapore where it saw a profit of $435m. 

It also saw a profit of $395m in India before taxation and a profit of $194m in China for the period. 

The results were announced along with confirmation from the bank that it faces fresh US fines over alleged breaches in its anti-money laundering systems, two years after it paid massive penalties for violating American sanctions. 

The bank said it was bracing to pay fines following the new investigation, with The New York Times reporting that regulators were seeking a "nine-figure penalty".

Competitor HSBC said earlier this week that profits fell for the first half of the year because one-off gains were not repeated and after a weaker showing at its investment arm. Its also warned of dangers of "risk aversion" by its bankers in the wake of industry-wide scandals