Standard Chartered Posts 10th Consecutive Year of Profits Despite Fines

Standard Chartered posted its tenth consecutive annual profit rise, despite its controversial $700m penalty for moving billions of dollars through the US banking system for clients from Iran and other sanctioned countries.

The British-based lender, which earns the bulk of its revenues in emerging markets and derives over half of its revenue from Asia, reported full year pre-tax profits of $6.9bn (€5.3bn / £4.6bn), a 1 percent increase from last year and broadly in line with analysts' estimates of $7bn from an average forecast of 16 analysts, polled by Reuters.

Operating income rose 8 percent to $19.1bn, according to an earnings announcement on its website.

The group also boosted dividend per share by 10.5 percent to 84.00 cents, from 76.00 cents per share in 2011

Chairman Sir John Peace said in the statement: "Throughout a turbulent decade - for the world economy and for banking - we have continued to deliver consistent value for our shareholders. Standard Chartered remains a growth story and we are sticking to our strategy, focusing on the basics of good banking, in markets we know well, with clients and customers with whom we have deep relationships.

"We are entering the new year with strong momentum in both of our businesses and the board remains confident for the year ahead."

Also in line with its pre-trading update in December last year, the bank revealed that a number of geographies provided strong performances in 2012.

The bank, which earns around 90 percent of its income and profits from Asia, Africa and the Middle East, said in the statement that 26 markets delivered over $100m of income and 25 markets grew at a double-digit rate. Both China and Wholesale Banking in Africa reached $1bn of income for the first time last year.

Hong Kong, which remains the bank's largest market, posted income of $3.4bn and "illustrates not only the pace of our growth, but also its diversity," according to the earnings statement.

However Standard Chartered's business in India, which accounts for about 10 percent of profits, slowed, with income falling 12 percent, as an increase in impairments resulted in profits falling by 16 percent in that area.

In August last year, the bank said in its half-year earnings announcement that it has "multiple growth engines" as 20 of its markets delivered double digit growth in income and subsequently boosted its dividend.

Only days after it posted its half-year earnings, Standard Chartered's shares plunged to their lowest level in four years when New York state authorities threatened to remove the bank's US licence, accusing it of "acting as a rogue institution" in its dealings with Iran.

Two weeks after this, Standard Chartered paid a civil penalty of $340m to the New York State Department of Financial Services (DFS), in order to settle the regulator's charges that the UK-listed bank hid at least a quarter of a trillion US dollars' worth of transactions linked to Iran, which is subject to stringent US sanctions.

Then, in December, the bank paid a $100m fine to the Federal Reserve and $227m to the Department of Justice for the same reasons as the DFS.

In today's earning announcement it says, subsequently, it has cut its bonus pool by 7 percent after the raft of fines.

The Hong Kong-listed Standard Chartered share price rose by over 1.8 percent to HK$211.20, on the day before the results were announced.

Standard Chartered's London-listed share price rose 3.5 percent in trading immediately after the earnings announcement to change hands at 1,843.5 pence each. The shares have risen around 13 percent over the past year.