Standard Chartered raises cash for expansion
British banking group Standard Chartered said today it planned to raise £1bn (€1.2bn) through a share placing to fund growth of its Eastern-facing businesses.
Standard, which makes 90% of profits from Asia, Africa and the Middle East, said economic trends have improved in its markets during the second quarter.
The London-based bank also reported a 10% gain in interim pre-tax profits to $2.84bn (€2bn) in the six months to June 30.
The company said the additional capital from the share issue will enable it to take “full advantage” of opportunities emerging from the financial crisis.
It forecast that one of the consequences of the crisis was likely to be an acceleration in the transfer of economic power from the West to the East.
Standard said the second quarter of 2009 had seen GDP rebounding in many of its markets.
It added: “The board firmly believes that the economic downturn will be shorter and less pronounced in these markets which it expects to return to growth far quicker than more developed markets.”
Today’s improved results performance was driven by strong momentum in wholesale banking, which mainly involves lending, cash management and associated interest rate and foreign exchange hedging.
Half-year profits from the division rose 36% to $2.25bn (€1.6bn) as Standard said the strength of customer relationships meant revenues from its top 50 clients lifted 40%.
In consumer banking, profits fell 57% to $348m (€242m) as a result of lower interest rates and pressure on its wealth management business.
However, the division was more profitable compared to the second half of last year, reflecting a series of cost saving and efficiency initiatives.
