StanChart plans 10,000 more staff

StanChart plans 10,000 more staff
By Steve Slater and Clara Ferreira-Marques Reuters - Wednesday, May 7 04:06 pm

LONDON (Reuters) - Standard Chartered said it has made a strong start to 2008 as Asian markets held up well and expects to add at least 10,000 staff this year, in contrast to contraction among rivals caused by the credit crunch.

The bank said on Wednesday it took a $97 million (49.7 million pound) profit hit in the first quarter from assets tarnished by the credit crunch, but said in an upbeat trading update it "has had a very good start to the year" despite turmoil in financial markets.

Finance Director Richard Meddings told Reuters in an interview the bank will continue investing in China, India and other fast growing markets and is likely to add 10,000 to 12,000 more staff this year to drive its growth.

It had 70,000 staff at the end of 2007 after adding 26,000 people in the last two years, and its plans are in stark contrast to the thousands of job cuts expected at UBS , Citigroup and other banks.

Standard Chartered said at its annual shareholder meeting that its key wholesale banking arm had seen a "particularly strong" start to 2008, with no material deterioration in the quality of its loan book.

The bank, which has benefited from its relatively light exposure to slowing U.S. and European economies, took $253 million in writedowns to account for the impact of impairment and widening credit spreads, lower than most of its rivals but in line with analysts' forecasts.

Some $156 million of that was due to a drop in the fair value of available-for-sale reserves and does not hit profits. The bank took a $300 million writedown on its assets in 2007.

By 3:30 p.m. Standard Chartered shares were down 0.9 percent at 18.68 pounds, underperforming the bank sector and broader market.

The stock trades at a big premium to UK rivals and is up 1 percent this year, compared with a 12 percent drop in the DJ Stoxx Europe banks index, after being less effected by writedowns and slowing profit growth and maintaining strong capital and liquidity.

"NOT UNSCATHED"

Standard Chartered said its consumer banking arm's income had risen by over 10 percent and asset quality had been strong despite "continued challenges" in Pakistan and Thailand.

"The economies of Asia, Africa and the Middle East are in pretty good shape. They are not unscathed by what is happening in western financial markets, but the forecasts for economic growth in these countries is still pretty robust," Peter Sands, chief executive, told reporters after the AGM.

He said the bank, which has made a string of acquisitions in recent years, would continue to look at opportunities for deals and more assets could become available due to the industry turmoil. But the bank would stay disciplined and organic growth would lead strategy, he said.