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StanChart raises earnings
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August 2, 2000: 5:52 a.m. ET
Bank raises half-year profit, plans cost cuts, job losses, divestment
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LONDON (CNNfn) - Standard Chartered Bank PLC announced a 31 percent increase in first-half earnings Wednesday, in line with expectations, and announced a cost-cutting program that would result in 6,000 job losses and the likely sale of its U.K. consumer finance division.
Standard, which does much of its banking business in Asia and has little exposure to Britain, said pretax profit rose to £356 million ($532 million) from £271 million, while earnings per share climbed 25 percent to 22.1 pence. Analysts surveyed by Reuters predicted first-half pretax profit would be between £340 and £380 million.
Profit growth stemmed from a doubling of the profit contribution from the bank's Hong Kong unit to £162 million, and a one-third drop in provisions for bad loans to £164 million. 
Standard said its three-year program to lower expenses would cost £480 million, including a £200 million restructuring charge this year, although it expects to save around £170 million a year as a result by 2003. The bank has decided to sell Chartered Trust, its U.K. consumer finance unit, and said it had received a number of approaches, with a deal likely in the next few weeks.
Standard (STAN) slumped 8 percent to 874 pence as investors were caught unawares by the costs involved in the reorganization.
"The restructuring of the bank was clearly signaled, but the size of the charge came as a bit of a surprise," banking analyst Chris Ellerton at UBS Warburg Dillon Read told Reuters.
Higher first-half profit "reflects the improving economic environment of our major markets and the results of our growth strategy," Chairman Patrick Gillam said in a statement. The bank said it saw encouraging signs for revenue growth in consumer and corporate banking, and expected its bad debt charge to fall further in the second half. 
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Standard Chartered
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