Standard Chartered close to Pakistan deal

Standard Chartered wrapped up the banking reporting season yesterday by signalling an interest in making a major acquisition alongside a 15 per cent jump in profits in the first half of its year.

The Asia-focused, emerging-markets lender is understood to be close to agreeing a £185m deal to take a stake of at least 66 per cent in Union Bank, Pakistan's sixth-biggest lender.

Under the terms under discussion, Standard is expected to buy out Union's chairman, Abdullah Basodan. The Saudi investor is Union's biggest shareholder with a stake of about 50 per cent. Should the deal close, Union's 53 branches would significantly bolster Standard presence in a country in which it has conducted business since 1858.

However, the London-listed Standard declared that it was no longer in the running to buy LG Card, South Korea's biggest credit card company.

Peter Sands, Standard's finance director, said: "The core of strategy is to grow organic-ally. However, we will look at acquisitions in our footprint - Africa, Asia and the Middle East - where we think we can add shareholder value."

Standard has itself been the subject of bid speculation in recent months after Temasek, the investment arm of the Singaporean government, took a 12 per cent stake in the bank in March. Then as now, Standard maintained that Temasek was a long-term investor and was not looking to assume control.

At $1.5bn (£790m), Standard's profits before tax were a touch better than expected over the six months to the end of June. At least 95 per cent of those profits are generated abroad. In South Korea, pre-tax profits more than doubled to $234m. Standard's higher profits were made despite losses in Taiwan.

The shares edged 36p lower to 1,274p, amid 10 per cent slower growth in consumer banking.