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Abu Dhabi, UAEThursday 13 December 2018

Standard Chartered profits soar 93 per cent

But interim dividend payment not on cards amid lack of clarity on reforms

The uptick in the global economy and recovery of oil prices will have positive reverberations in the Middle East according to Standard Chartered. Isaac Lawrence / AFP
The uptick in the global economy and recovery of oil prices will have positive reverberations in the Middle East according to Standard Chartered. Isaac Lawrence / AFP

The Asia-focused bank Standard Chartered on Wednesday said pre-tax profits were up 93 per cent in the first half of the year as it continues to rally after job cuts and restructuring.

But it stopped short of paying interim dividends, with the chairman José Viñals saying more clarity was needed on the impact of global regulatory reforms which are still under consideration.

The bank swung back to profit in 2016 after scoring its first annual loss for over a quarter of a century in 2015 as it struggled to cope with the effect of bad debts.

Results in the six months to June showed underlying pre-tax profit of US$1.9 billion, up from $994 million year-on-year.

Net profit almost doubled to $1.2bn from $580m in the same period a year ago.

Underlying loan impairments were at $583m, down from $1.1bn.

The chief executive Bill Winters described the performance as "encouraging" and said the bank was now leaner and more efficient.

"Although we still have a long way to go, we are headed in the right direction," he saidt.

However, business confidence remains fragile, said Mr Winters, who cited geopolitical uncertainty and the unknown outcomes of regulatory reforms.

Mr Winters replaced the former chief executive Peter Sands in 2015 after shareholder calls for a boardroom cull following profit warnings.

The London-based bank announced 15,000 job cuts around the world that year and said that it would exit or restructure $100bn of assets to re-focus on affluent retail clients.

In Wednesday's results statement, both Mr Winters and Mr Viñals also said they would prioritise fighting financial crime and would strengthen their own compliance programmes after a number of cases against the bank.

Hong Kong's stock market regulator filed a lawsuit against the bank over "market misconduct" for a 2009 initial public offering on the city's bourse in January.

In August 2014, the bank was hit by US regulators with a $300m fine and restrictions on its dollar-clearing business for failing to detect possible money-laundering.

It paid $667m in 2012 to settle charges that it had violated US sanctions by handling thousands of financial transactions involving Iran, Myanmar, Libya and Sudan.

* AFP