Standard Chartered PLC has announced an eighth successive year of record income and operating profit, demonstrating the consistent and sustainable growth strategy of the Group.
The bank said it will continue to invest selectively in the business, positioning it to take advantage of the long-term growth opportunities across markets, whilst maintaining a strong focus on the fundamentals of the bank.
Normalised earnings per share increased 14 per cent and dividend per share was up 9 per cent, with RoE at 14.1 per cent, as the Group continues to deliver long-term value for shareholders.
The bank said 2010 delivered strong and diversified profit and income growth across our markets in Asia, Africa and the Middle East with 23 markets delivering over US$100 million of income, with 11 contributing over US$ 500 million.
On the other hand, 15 markets delivered over US$100 million of profit, with India and Hong Kong both delivering over US$1billion.
“We continue to be in the right parts of the world, with strong long-term growth opportunities,” the bank said.
Peter Sands, Group Chief Executive Standard Chartered, said this has been a strong year for the Group, with good growth in volumes as the bank stole market share from competitors.
“We have continued our planned investment in the businesses to position us well for the long-term opportunities across our markets, whilst delivering our eighth year of record profit and income. We continue to see strong momentum in both businesses, and the Group has a seen a record start to 2011,” Sands said.
The bank’s Wholesale Banking and Consumer Banking saw business activity in a number of products grow strongly over the year.
The division saw income climb by 7 percent to just under US$ 10 billion, with profit up 17 percent at US$4,770 million and Wholesale Banking has now achieved double-digit profit growth every year since 2002.
Client income grew 17 per cent on the back of growing trade and investment flows to and from our markets, with trade finance assets and contingents growing 28 per cent, commodities by 66 per cent, and FX by 14 per cent. Wholesale Banking continues to see strong growth momentum as it deepens client relationships and invests in product and service sets to meet client demand, with corporate finance and financial markets growing income by 32 per cent and 18 per cent, respectively.
Income growth was underpinned by a strong increase in cash management volumes, up 21 per cent.
On the other hand, Consumer Banking continued to make strong progress in its transformation, with income up 8 percent to just over US$6 billion, whilst profit climbed 51 per cent to US$1.31bn, despite ongoing margin compression.
Income growth was driven by good volume growth in mortgages, credit cards and personal loans, alongside a recovery in wealth management revenues.
The focus on the strong fundamentals of the consumer business continues, with a low average loan-to-value of around 51 per cent on the mortgage book, and a well-diversified and strongly secured loan book.
“We continue to attract strong deposit growth, up 15 per cent on 2009, with 59 per cent of deposits now in current and savings accounts (CASA),” it said.
The investment in the business continues as ‘we position for long-term growth, with 113 new and refurbished branches in 2010, alongside 2,000 new frontline staff and an increase in technological innovations with an expansion of our mobile and online banking offering.
The Group continued to maintain a strong focus on the fundamentals of the balance sheet, with the recent rights issue protecting our ability to meet Basel III capital requirements whilst simultaneously taking advantage of the growth opportunities in our markets.
It added that its balance sheet remains conservative, highly liquid, with minimal refinancing requirements.
Strong organic equity growth of over US$4.2 billion, supplemented by a successful capital raising, saw Core Tier 1 capital rise to 11.8 per cent, up from 8.9 per cent in 2009, with total capital up 1.9 per cent to 18.4 per cent.
The normalised cost/income ratio rose slightly to 55.9 per cent, reflecting the deliberate and strong investment across the Group.
The advances to deposits ratio remain strong at 77.9 per cent as the Group continues to grow both sides of the balance sheet. Customer deposits grew by 23 per cent (US$ 60 billion) to US$ 317 billion, whilst customer assets were up 22 percent (US$45 billion).
Continued action to de-risk the asset book positions us well to deal with any future economic uncertainty. Loan impairments fell significantly by 56 percent to US$883 million. Consumer Banking loan impairments fell 45 per cent year on year, whilst Wholesale Banking loan impairments declined 68 per cent in the same period.