Standard Chartered's 2004 profit up as provisions fall
Standard Chartered's 2004 profit up as provisions fall
Bloomberg, London
Standard Chartered Plc., the British bank that makes about two- thirds of its profit in Asia, said 2004 profit rose 44 percent as it set aside less money for loans that may not be repaid.
Net income advanced to US$1.48 billion from a restated $1.02 billion a year earlier, the London-based lender said on Wednesday in a Regulatory News Service statement.
That was higher than the $1.36 billion median estimate of 10 analysts surveyed by Bloomberg.
Chief Executive Mervyn Davies, 52, is buying companies in countries including Korea and Indonesia, betting they'll grow faster than developed economies in Europe.
He led the $3.3 billion purchase of Korea First Bank last month to gain a lender with more than 3 million consumers in Asia's third-biggest economy.
"There has been broad based revenue growth in almost all our geographies and our bad debt performance has been excellent," Bryan Sanderson, the company's chairman, said in the statement. Shares in Standard Chartered gained 5 percent last year, making it the fourth-worst performing stock on the 10-member FTSE 350 Banks Index, which advanced 6.8 percent.
Earnings gained after Standard Chartered set aside less money for bad loans. Full-year provisions declined to $214 million from $536 million a year earlier.
Annual provisions were expected to drop to $287.5 million, according to the median estimate of eight analysts.
In the first half, the consumer-banking business reported a 47 percent increase in operating profit to $524 million.
The bank's purchase of Korea First, its biggest acquisition in a century and a half, gave it 404 branches in the country and a 6 percent share of the banking market.
The purchase will dilute 2005 earnings per share by 5 percent or less, Davies said at the time of the purchase.
Standard Chartered is also expanding in the Middle East and South Asia, regions that generated 19 percent of pretax profit during the first half.
The bank has become the first international lender to win a license to open a branch in Iran since the 1979 Islamic revolution in that country.
In neighboring Iraq, Standard Chartered is one of three banks to win the first licenses to operate in the country after the U.S.-led invasion.
Second-half profit probably rose 11 percent to $612 million from $549 million a year earlier, according to Bloomberg calculations based on annual estimates.
Bloomberg calculates second- half profit by deducting published first-half figures from annual earnings.