UK bank lifts regional profit.
Dubai Standard Chartered yesterday announced that its operating profit for the Middle East and South Asia (Mesa) region rose 64 per cent in the first half of 2010 to $364 million compared to $142 million in the same period last year.
While income from the consumer banking business reported a flat growth of two per cent to $344 million, wholesale banking income was down by $94 million, or 12 per cent, to $712 million.
Increases in client income only partially offset the drop in own account incomes. Operating expenses in the region were up $27 million, or 10 per cent to $294 million, driven by staff and investment expenditure.
In the Mesa region, the bank's consumer banking business reported an operating profit of $36 million in the first half of 2010, compared to an operating loss of $2 million in the first half of 2009.
While the bank's consumer banking income from UAE operations grew six per cent, Pakistan income fell six per cent due to lower customer lending and compressed margins.
"Growth in focus segments such as private banking and priority banking was strong, but liability margins continued to be under pressure in a low interest rate environment with increased competition," Standard Chartered said in a statement.
The bank said in its interim results that its operating expenses in MESA were higher by $25 million (13 per cent) at $221 million, primarily driven by the UAE where expenses were up by 26 per cent as the business continued to invest in frontline staff. Loan impairments in the region were lower at $87 million, 39 per cent down from $143 million in the first half of 2009.
The bank reported a global net profit growth of $2.1 billion as it cut its losses on bad loans by more than half. Provisions for bad loans and other credit risks fell from $1.1 billion a year ago to $437 million in the first half of this year.
Standard Chartered Group Chief Executive Peter Sands said: "This is not a bounce back, a sharp recovery in profits; it is simply another set of record results, continuing a trajectory that now extends over more than seven years."
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