StanChart says Korea woes, currency weaknesses to temper profit growth
By Lawrence White
HONG KONG (Reuters) - Asia-focused Standard Chartered Plc (STAN.L: Quote) said its operating profit grew at a low single-digit rate so far this year, with the third quarter hammered by the poor performance of its South Korea business and falling emerging-market currencies.
Income for the third quarter dropped by a low single-digit percentage from a year earlier, the bank said in its quarterly trading update on Tuesday. The bank, listed in both Hong Kong and London, does not publish third-quarter profit figures.
StanChart has had a hard time in South Korea, where a government scheme is allowing more forgiveness on debts, since acquiring First Bank in 2005 for $3.3 billion. The bank has also been hit by a broad slowdown in Asia.
StanChart, which makes more than 90 percent of its profit in Asia, Africa and the Middle East, said the performance of its South Korea unit pushed down the profit of the group's entire consumer banking division.
The bank also expects a non-recurring tax-related cost in South Korea of $60 million for the full year. In August, StanChart said it would take a $1 billion hit on the value of its Korean business.
Excluding the weak performance in South Korea, StanChart's income and profits in the consumer banking division rose by a high single-digit percentage, it said.
So far this year, Stanchart's (2888.HK: Quote) shares are down 3 percent in London trading, one of the worst performing bank stocks in Europe.
The bank's shares in Hong Kong traded down 0.5 percent on Tuesday afternoon, following the release of the quarterly statement. Continued...