StanChart sees tough first half

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“This has been a disappointing first half, particularly in financial markets.  We are taking the right actions in response to a challenging environment – managing costs very tightly, disposing of non-core businesses and optimising the deployment of capital,” said Standard Chartered group chief executive, Peter Sands.

“As we navigate this difficult period, we remain focused on the drivers of value creation for our shareholders, continuing to build our franchise to make the most of the enormous opportunities in our markets.”

However the international banking group, which is expected to release its results for the half year ending 30 June 2014 on 6 August, also indicated that the momentum of most of the group’s businesses remain in line with expectations.

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“Whilst expectations for the group’s first half performance remain ahead of the second half of last year, group income in the first half of 2014 is expected to be down by a mid-single digit percentage on the first half of 2013, or by a low single digit percentage on a constant currency basis,” Standard Chartered said.

“Markets such as China and Africa continue to grow income well, offset by weaker performance in markets such as India, Korea and Singapore.”

The group’s costs are expected to remain well controlled while its loan impairment is expected to be up by a high-teens percentage in the first half of 2014. Group operating profit however, is expected to be down by around 20 per cent.

“Looking forward, transaction banking has momentum, wealth management will benefit from the recently signed Prudential PLC Bancassurance agreement, and corporate finance has a good pipeline.  However the outlook for financial markets remains somewhat uncertain,” said Standard Chartered.

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“We are responding to near term challenges and we remain confident in the strong underlying potential of our markets and of our competitive positioning, banking the people and companies driving investment, trade and the creation of wealth across Asia, Africa and the Middle East.”