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Standard Chartered H1 net profit up 8.4%

Standard Chartered said on Wednesday (Aug 6) its year-on-year profit for the first half of 2014 was up slightly at 8.4 per cent, but confirmed it faces fresh US fines over alleged breaches of money-laundering regulations.

HONG KONG: Standard Chartered said on Wednesday (Aug 6) its year-on-year profit for the first half of 2014 was up slightly at 8.4 per cent, but confirmed it faces fresh US fines over alleged breaches of money-laundering regulations.

Net profit stood at US$2.31 billion (S$2.89 billion) for the six months ending June 30, up from US$2.13 billion (S$2.66 billion) in the same period last year, though the London-based and Asia-focused bank saw increasing losses on loans and a weak financial market affect its operations.

The bank's profit before tax was down 20 per cent at US$3.27 billion (S$4.09 billion) from US$4.09 billion (S$5.11 billion) last year, with impairment losses on loans seeing a loss of US$846 million (S$1.06 billion) increased from last year's loss of US$730 million (S$913 million) in the same period.

Operating income fell almost five per cent to US$9.27 billion (S$11.6 billion) from US$9.75 billion (S$12.2 billion) in the previous year.

"Our performance in the first half of 2014 is clearly disappointing. It is not what we strive for and not what our investors expect," the group's chief executive Peter Sands said in the filing. Sands cited continued weakness of the financial markets and the bank's challenges in Korea as major reasons for the weak performance.

"We have completely reorganised the Group, made a number of disposals, re-worked our segment strategies, and redirected capital and investment spend," Sands said of the first half, adding that 2014 will be a "challenging" year.

The company said it saw a loss of US$126 million (S$158 million) before taxation for Korea where the bank announced the sale of its consumer finance and savings bank businesses. "Turning this business around will take time and a lot of work on multiple fronts, not least because the industry as a whole faces huge challenges," Sands said.

The southern Chinese city of Hong Kong was the bank's most profitable market where it saw a profit of US$900 million (S$1.13 billion) before taxation for the period, followed by Singapore where it saw a profit of US$455 million (S$569 million). It also saw a profit of US$395 million (S$494 million) in India before taxation and a profit of US$194 million (S$243 million) in China for the period.

The results were announced along with confirmation from the bank that it faces fresh US fines over alleged breaches in its anti-money laundering systems, two years after it paid massive penalties for violating American sanctions. The bank said it was bracing to pay fines following the new investigation, with The New York Times reporting that regulators were seeking a "nine-figure penalty".

Competitor HSBC said on Monday (Aug 4) that profits fell for the first half of the year because one-off gains were not repeated and after a weaker showing at its investment arm. Its also warned of dangers of "risk aversion" by its bankers in the wake of industry-wide scandals.

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