Peter Sands: Can StanChart cope with wholesale change?
While most have spent the past two years hunkering down, Standard Chartered has used the financial crisis as an opportunity to grow its wholesale business. Sudip Roy asks CEO Peter Sands if this signifies a change in the bank’s culture.
Standard Chartered goes on the march
AS A BANK whose history has been shaped by its experiences in volatile markets, Standard Chartered knows how to steer through turbulent waters. So perhaps it is not surprising that the emerging markets specialist has coped better than most during the financial crisis.
While many of its rivals were posting losses in 2008, it delivered record pre-tax operating profits of $4.57 billion. This year is proving just as lucrative, with the bank’s operating profit for the first six months hitting $2.84 billion, up 10% year on year. Its results are reflected in its share price, which is now at the level it was at in January 2008, recovering the 46% fall that it suffered last year.
The most interesting aspect of the bank’s results is what is powering them: its wholesale division. In 2008, the wholesale banking division’s income jumped 43% to $7.49 billion while its operating profit before tax increased 28% to $3 billion. It accounted for 65% of the group’s profit, compared with 58% in 2007.
Its performance has continued to be strong this year, with its operating profit at $2.25