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Standard Chartered Singapore reports strong client activity and business momentum in FY2013 despite a challenging year

Press Release

FOR IMMEDIATE RELEASE

Standard Chartered Singapore reports strong client activity and business momentum in FY2013 despite a challenging year

FY2013 Highlights

  • Income at US$2,103 million1, down five per cent year-on-year (YoY) from US$2,203 million in FY2012
  • Operating profit before tax at US$896 million, down seven per cent YoY from US$966 million
  • Expenses at US$1,129 million, down three per cent YoY from US$1,169 million
  • Top- and bottom-line performance impacted by severe margin compression, regulatory cooling measures and lower Own Account Income
  • Strong client activity and good business momentum
  • Strong and liquid balance sheet; robust management of risks and costs
  • Local incorporation of its retail and SME business; successful upgrading of its core banking system

5 March 2014, Singapore – Standard Chartered Bank in Singapore (the Bank) has posted an income of US$2,103 million and operating profit before tax of US$896 million for the financial year ended 31 December 2013 (FY2013). Customer loans grew 11 per cent year-on-year (YoY), backed by a strong and liquid balance sheet. Although the Bank saw strong client activity and good business momentum in the year, its income and profits were impacted by severe margin compression, regulatory cooling measures and lower Own Account Income, which is a result of difficult market conditions in the second half of 2013 and higher cost of holding high quality liquid assets. Expenses dropped by three per cent YoY to US$1,129 million, reflecting a tight control on costs.

In 2013, the Bank completed the local incorporation of its retail and SME business and successfully implemented the upgrading of its core banking system. In addition to these two major projects, the Bank took the opportunity to increase client activity with the objective of ensuring broad-based income resilience in the long term. These initiatives, backed by a strong and liquid balance sheet, and effective management of costs and risks, position the business for future growth opportunities.

Strong client activity
The Bank maintained strong client transaction activity across both core businesses. Total customer loans grew by 11 per cent during the year to reach US$62.2 billion. On the Consumer Banking end, Credit Card spend increased by 13 per cent YoY. On the Wholesale Banking side, average cash volumes increased 36 per cent YoY while average trade assets increased 25 per cent YoY. Corporate Finance deals saw a 40 per cent YoY increase and Foreign Exchange (FX) notional amount went up by 36 per cent. The franchise’s balance sheet growth in assets and liabilities also contributed US$125 million Net Interest Income to top line.

Broadened customer activity and deepened relationships
As part of its strategy to ensure broad-based income resilience, the Bank focused on increasing corporate client activity through acquisition financing and product diversification. Also, the Bank grew its Transaction Banking CASA balances by leveraging on new capabilities and capitalising on RMB opportunities. As a result, the quality of CASA improved with operating accounts increasing from 47 per cent to 55 per cent.

Continued focus on cost efficiency
Total expenses dropped by three per cent YoY. As part of a move to bolster its infrastructure for its next phase of growth, the Bank had invested in the local incorporation as well as an upgrading of its core banking system. However, the Bank maintained strong discipline to drive productivity and efficiencies which helped the Bank manage its expenses down.

Strong and liquid balance sheet
In addition, the Singapore franchise also maintained its robust financial position. The Bank posted an Asset-Deposit ratio of 84 per cent as the Bank continues to practise funding before lending.

Sanjeev Agrawal, Chief Financial Officer, Standard Chartered Bank Singapore said:
“Standard Chartered Singapore remained focused on growing our presence by deepening client relationships and broadening and diversifying our client base. While the Singapore franchise maintained its position as the second largest contributor to the Group’s income and profit, and although our prudent cost management and resilient business model has helped to mitigate some of the industry-wide headwinds, we were not spared from severe margin compression and regulatory cooling measures as well as difficult market conditions in the second half of 2013, which had an impact on our top- and bottom-line performance.”

We will continue to focus on supporting our clients, cost efficiency and strong risk management to drive long-term sustainable growth.”

– Ends –

1 Excluding Own Credit Adjustment (OCA). OCA is the adjustment taken for the firm’s own credit risk on the liabilities reported at Fair Value, under the Fair Value Measurement rules (FVM) Fair Value measurement is an accounting standard under IFRS 13, whereby firms may choose to carry trades at Fair Value instead of amortised cost.

For more information, please contact:

Lim Siow Joo
Corporate Affairs, Singapore
Standard Chartered Bank
DID: ++65 6596 7759
Email: siow-joo.lim@sc.com

Jasmine Zhao
Corporate Affairs, Singapore
Standard Chartered Bank
DID: ++65 6596 7756
Email: jasmine.zhao@sc.com

Note to Editors:

Standard Chartered in Singapore is part of an international banking group with an extensive network of over 1,700 branches and outlets in more than 70 countries in the Asia Pacific Region, South Asia, the Middle East, Africa, the United Kingdom and the Americas.

It is committed to building a sustainable business over the long term and is trusted worldwide for upholding high standards of corporate governance, social responsibility, environmental protection and employee diversity. The Bank’s heritage and values are expressed in its brand promise, ‘Here for good’.

Standard Chartered has a history of more than 150 years in Singapore, opening its first branch here in 1859 and in October 1999 was among the first international banks to receive a Qualifying Full Bank (QFB) license, an endorsement of the Group’s long-standing commitment to its businesses in the country.

The Bank transferred its Singapore Consumer Banking retail and SME banking business to a locally-incorporated subsidiary, Standard Chartered Bank (Singapore) Limited on 7 October 2013.

The Bank in Singapore serves both Consumer and Wholesale Banking customers.

Consumer Banking provides credit cards, personal loans, auto loans, mortgages, deposit taking and wealth management services to individuals and small to medium sized enterprises. Wholesale Banking provides corporate and institutional clients with services in trade finance, cash management, lending, securities services, foreign exchange, debt capital markets and corporate finance.

The Bank employs over 7,400 people in Singapore and has a network of 19 branches, 8 Priority Banking centres and 31 ATMs. Standard Chartered is the only international bank to offer NETS service, giving its customers access to EFTPOS at over 17,000 outlets island-wide.

The Bank’s global businesses – Consumer and Wholesale Banking – are managed out of Singapore, as is its global Technology & Operations function.