Sub Prime Crisis - Forecasts StanChart

Sub Prime Crisis  - Forecasts StanChart

Announces 27 per cent increase in pre-tax profits to $4.04 billion (£2.05 billion).

Shares in Standard Chartered rose 4.6 per cent in early London trading as the bank announced a 27 per cent increase in pre-tax profits to $4.04 billion (£2.05 billion) and offered a confident outlook for 2008.

It was the first time profits had exceeded $4 billion. Operating income rose 28 per cent to $11.1 billion.

Peter Sands, chief executive, said the bank's main markets in Asia and the Middle East, would show "much greater resilience than in previous cycles" to economic slowdown in the US and Europe. Asian domestic economies had expanded and trade had increased between them, making them less reliant on exports to the west, he said.

The group plans a 11.7 per cent increase in the total dividend for 2007 to 79.35 cents. The shares rose 73p to £16.53.

Sands cautioned that the group would not be immune to continued turbulence in credit markets. "The turmoil is far from over, we do expect further shocks and surprises," he said.

However, he said the bank had "never been in better shape" and was well positioned to weather such shocks, having strong finances and having paid close attention to its risk profile. The group's tier 1 capital ratio, an important measure of financial strength, rose from 8.3 per cent to 9.8 per cent over the year.

Total losses from the US subprime-related turmoil had been $300 million, with its interest in Whistlejacket, the structured investment vehicle which went into receivership recently, accounting for $133 million of that. The figure was in line with previous guidance.