Standard denies board split on independence

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The Independent Online
Standard Chartered, the international bank, yesterday denied its board was split on the question of independence.

Speaking at a presentation of the bank's annual results, Patrick Gillam, Standard's chairman, said the board was committed to the strategy of independence. "This is the unanimous view of the Standard Chartered board", he said. Malcolm Williamson, the chief executive, added, "And I can confirm that."

Recent reports had suggested Mr Williamson had made merger overtures to Martin Taylor, chief executive of Barclays. In contrast, Mr Gillam was reported to be in favour of independence.

Earlier this week, Standard Chartered issued a statement denying it was in merger talks. This followed weekend press reports that Mr Taylor and Mr Williamson discussed the possibility of a merger over dinner in an exclusive London restaurant.

There is still dispute between sources at the banks, however, about who broached the subject of a merger with whom. Sources at Standard Chartered have categorically denied that Mr Williamson brought up the possibility of a link-up. Sources close to Mr Taylor have suggested that the conversation was "not completely one-sided".

Standard Chartered shares finished the day up 124p at 882p. Analysts said the share price rise was due partly to the better-than-expected results and partly to the continued hope in some parts of the City that Standard Chartered could still forge links with a UK banking rival.

Headline pre-tax profits at the bank were flat at pounds 870m, largely because of sizeable provisions for bad debts in Asia. However, analysts were cheered by the strong underlying profit growth, by hints of future acquisitions in the Middle East and in Asia, and by the bank's apparently prudent approach to the Asian crisis.

The bank made specific provisions for the crisis of pounds 201m in 1997. It also added pounds 100m to its general, unspecified debt provisions.

Tim Sykes, analyst at Credit Suisse First Boston, said: "They understand their market and their business mix is very focused on certain areas, like trade finance and consumer lending."

Peter Wood, finance director, said the bank had only lost money on foreign exchange on one day last year. That was on 2 July, the day when the Thai baht devalued.

Mr Gillam said: "Our 1997 results demonstrate our capacity to produce excellent results when our main markets in Asia are suffering considerable turmoil".