Standard Chartered Bank earnings balloon

Foreign bank Standard Chartered Bank of the Philippines (SCBP) is looking at a double-digit growth rate in terms of net earnings for 2004. That means a minimum 10-percent growth rate would result in a profit figure of $17.16 million.

In 2003, it registered profits after tax of $15.6 million after a meager $1.8 million the year before.

However, bank sources said that the oldest foreign bank in the Philippines was actually looking at a 50-percent growth rate for the entire 2004 to almost $47 million.

No matter the target, SCBP has outlined five priorities for the second semester of 2004. These are to accelerate consumer banking growth, strengthen wholesale bank portfolios, implement state-of-the-art operating platforms, drive out serve to exceed customer satisfaction, and people and community development.

In fact, SCBP will launch a new platform worth $3.2 million designed for customer satisfaction and convenience within the next six weeks.

Meanwhile, Standard Chartered Bank Plc reported a pre-tax profit of 52 percent for the entire group from $730 million in the first semester of 2003 to P1.1 billion. Return on equity (ROE) improved to 19 percent from 14.3 year-on-year.

Revenue growth reached 16 percent due to accelerated business momentum. In contrast, a notable increase of 13 percent in costs due mainly by the accelerated investment in both wholesale and consumer banking.

The first semester figures likewise indicate a balanced growth in business, geography and products.

"Business has been diversified and features multiple engines of growth," it said in a statement.

Wholesale banking profits increased by 31 percent with significant growth in revenue to 13 percent year-on-year.

Consumer banking profits increased by 47 percent and revenue increased by 10 percent. Costs are up by 13 percent due to business investments aimed to spur further growth opportunities. Likewise, cost to income ratio stood at 53.2 percent.

In all areas where the bank operates, profits were recorded except the Middle East and South Africa area where it reported the same amount of earnings compared to the previous year.

In the Asia Pacific region including the Philippines, profits before tax rose from $40 million from January to June 2003 to $143 million in the same period this year.

In terms of consumer banking across the globe, all areas again registered positive gains except in the case of the Americas and United Kingdom group. From $40 million in the first semester last year, it slipped slightly to $39 million in the same period in 2004.

In the Asia Pacific region, it grew to $180 million this year from $157 million.

In terms of wholesale banking revenues, group revenues grew from $1.13 billion in the first six months of 2003 to $1.28 billion in the same period this year.

Trade and lending rose to P433 million from $393 million, while global markets rose from $553 million last year to $615 million this year.

Cash management and custody exploded by almost 24 percent from $185 million last year to $229 million this year. – Ted Torres