Stanchart sees Q1 profit decline on increased costs

 

Standard Chartered said on Wednesday its first quarter operating profit was likely to be slightly lower than a year ago as an increase in hiring, and wages, pushed up costs.

 

London-based Standard Chartered , which earns about four-fifths of its income from Asia, said group expenses were up by a low single digit percentage, while the additional 560 employees it hired in the quarter, and wage inflation, had pushed staff costs up by a high single digit percentage.

 

Overall income would be slightly higher compared to the same year-ago period, the bank said, thanks to client volume growth. Standard Chartered does not issue full quarterly numbers, and releases its earnings twice a year.

 

The bank has notched up 10 years of consecutive record profits thanks to strong Asian markets. Hong Kong was the standout market in the first quarter this year, growing at a double digit rate, while growth in Korea and Singapore weakened.

 

Standard Chartered holds its annual shareholder meeting in London later on Wednesday, when a disagreement over corporate governance could again flare up with Singapore investor Temasek, its biggest shareholder.

 

Temasek, which owns 18% of Standard Chartered, last year abstained from voting to re-elect some directors in a signal it disagreed with how the bank constructed its board.

 

The AGM will also be the first since Standard Chartered was hit last year by a $667 million settlement on charges it violated U.S. sanctions against Iran, Sudan, and other countries. It was a rare blip for the bank, which agreed to a deferred prosecution agreement as part of the settlement, meaning its U.S. operations are monitored.

 

The bank is expected to grow earnings and revenues by about 10% this year, lifting pretax profits over $7.5 billion. It aims to increase costs broadly in line with revenue growth, and has said it could add about 2,000 jobs this year.