In the week that South Korea sought IMF assistance and Yamaichi announced bankruptcy, it was easy to miss the tiny column inches devoted to Jardine Fleming's flagging results. The latest figures show a continued decline in the Hong Kong-based investment bank's profitability. In the first half of 1997 it made a net profit of $29 million, meaning its contribution to parent Robert Fleming's profits had reached an all-time low of 16% of the Scottish bank's earnings. This is down from 28.8% last year, and well short of the target 25% to 33% Fleming wants.
Robert Fleming's chairman John Manser played down the results commenting, "we are not an Asia-centric business any more". But what he means is that the 50%-owned joint venture, formed in 1970 with top Hong Kong conglomerate Jardine Matheson, is no longer generating the returns it used to. Its net profits have fallen for three straight years from a peak of $211 million in 1994, to $124 million in 1995 and to $84 million in 1996. That translates into a drop in the firm's return on equity from 70% in 1994 to 18.5% in 1996.
This year's result will probably be lower still.