LONDON (Reuters) - Standard Chartered beat forecasts with a 27 percent rise in 2007 profit and said it was set for another strong year as Asian markets were well placed to cope with a U.S. economic downturn, sending its shares higher.
By Steve Slater
LONDON (Reuters) - Standard Chartered beat forecasts with a 27 percent rise in 2007 profit and said it was set for another strong year as Asian markets were well placed to cope with a U.S. economic downturn, sending its shares higher.
Standard Chartered, which makes three-quarters of its profits in Asia, said on Tuesday it made a record pretax profit of $4.04 billion last year, up from $3.18 billion in 2006 and above the average forecast of $3.92 billion in a Reuters Estimates poll of analysts.
The bank took a $300 million writedown on its exposure to risky assets, including a $116 million hit on its Whistlejacket structured investment vehicle, but the total was modest compared to losses at other major banks.
!ADVERTISEMENT!It said 2008 had started "amid almost unprecedented market volatility," but that it had made an excellent start, particularly in wholesale banking.
"They're talking about double digit (income and earnings) growth, which you're not hearing too often (in the banking sector) at the moment," said MF Global analyst Simon Maughan.
At 0925 GMT, Standard Chartered shares were up 6 percent at 16.75 pounds, the biggest rise on the FTSE-100 index. The stock has beaten the DJStoxx European banks index by 37 percent over the past year due to the bank's relatively light exposure to slowing U.S. and European economies.
"We're very much open for business, our markets are open for business, but it's about being alert to the nature of risks," said Peter Sands, Standard Chartered chief executive.
"We wouldn't assume that our markets will be unaffected by any slowdown in the west, but we see them as having much greater resilience than in previous cycles," he told reporters on a conference call.
Sands said he remains open for more acquisitions to boost growth, following a string of purchases in recent years, but it was too soon to tell if market turmoil will throw up more opportunities to buy assets at knock-down prices.
"The thrust of our strategy is organic growth, but we are constantly on the lookout for acquisitions that complement organic growth," he said.
Standard Chartered said its operating income jumped 28 percent to $11.1 billion, while expenses rose 30 percent to $4.8 billion. Underlying costs rose 24 percent, just ahead of underlying revenue growth of 23 percent.
Cost and revenue growth are likely to be broadly in line with each other in 2008, Sands said.
The bank said its entire exposure to asset-backed securities (ABS), including collateralized debt obligations (CDO), was under $6 billion.
(Additional reporting by Clara Ferreira-Marques and Mark Potter; Editing by Quentin Bryar/Rory Channing)
