Singapore becomes Stanchart's No.2 global money earner

Singapore becomes Stanchart's No.2 global money earner
By Ryan Hyang | Posted: 04 August 2011 2022 hrs
     
SINGAPORE: Singapore climbed to second place as a global money earner for the emerging markets specialist Standard Chartered Bank.

The Singapore unit of the UK-based bank posted record results for the first half, although cost pressures from staff expenses continue to be a concern.

On the group level, it did better than expected, with Singapore a key part of that reason. It was the number two market just behind Hong Kong.

Both markets overtook India which underperformed and dropped from number one.

In the first half, operating profit in the Singapore unit rose 11 per cent from last year to a record US$465 million.

Revenue also hit a new high, passing the US$1billion mark for the first time.

First-half pre-tax profits for the group were US$3.64 billion.

Standard Chartered Bank's regional chief executive (Singapore and Southeast Asia), Ray Ferguson, said: "We managed to sustain business momentum and continue to grow our business due to strong fundamentals built over the years, focusing on investments to upscale talent and capabilities."

But "up-scaling talent" also cost the bank more.

It was the second Singapore lender on Thursday to report cost pressures from salaries.

The country's second biggest bank, OCBC, also said staff costs drove up operating expenses last quarter.

OCBC's June quarter operating expenses rose 11 per cent on-year to S$618 million, driven by a 14 per cent rise in staff costs.

On a global level, StanChart's staff costs rose 15 per cent to US$3.22 billion.

In Singapore, expenses grew 22 per cent to US$582 million partly due to both infrastructure investments and staff costs.

Ferguson said: "There is a tight market and there is salary cost inflation but also built into that number, there has been a growth in both the number of people and we have up-skilled and up-tiered a number of roles.

"It is not all down to wage inflation, some of it is due to increase of the size of the base.

"In terms of the outlook specifically in Singapore, we expect the very tight labour situation to remain, and what comes with that will be upward pressure on salaries.

"And, it's good news that we don't have people looking for jobs. It's also underscoring the success that Singapore is having as an overall place to do business."

Stanchart expects low interest rates to continue putting pressure on margins.


- CNA/ck

- wong chee tat :)