Standard Chartered posts record $1.1bn first half profits

Standard Chartered, the London and Hong-Kong listed bank, reported record first half profits yesterday, beating analysts' expectations and hiking its interim dividend by another 10 per cent.

Pre-tax profits rose more than 50 per cent over the first six months of 2004, to $1.1bn (£600m), on an increase in net revenue of 16 per cent. Analysts had predicted profits of around $975m. Whilst overall costs were up 14 per cent, bad debts fell 47 per cent over the period.

Peter Sands, the finance director, said the results were due to an organic growth strategy, which saw operating profits in its consumer banking arm rise by 47 per cent over the half, and profits in its wholesale division grow by 31 per cent.

Continued prosperity in Asia, where the bank generates two-thirds of its profits, has been central to the group's success over the past six months. However, Mr Sands said the bank's other principal markets, Africa and the Middle East, have also performed strongly.

Earlier this year, the group became the first international bank to gain a license to operate in Iran since the country's Islamic revolution in 1979. It is also one of three western banks to open branches in Iraq since the war.

Mr Sands refused to comment on rumours that Standard is keen to acquire a stake in the South African group, Standard Bank, reasserting that the company remains committed to mainly organic growth rather than acquisition. He said profits would be reinvested to maintain its current momentum. "We have taken advantage of our performance to invest particularly in the consumer bank," he said.

Mr Sands also denied the bank was vulnerable following the death of its largest shareholder Tan Sri Khoo. "TSK, as we know him, was a very supportive shareholder," he added. "We also know the family and they continue to be very supportive shareholders too. We don't see ourselves as being under any particular threat."

After initially dipping, shares in the company closed up 1.3 per cent at 924p, giving the company a market value of £10.8bn. Its shares are currently trading around the same levels as it began the year, making it the third best performer amongst Britain's 11 listed banks.