Cuts and Asian growth puts Standard Chartered on track for record profits

Staff cuts coupled with growth in Hong Kong and other key Asian markets have put Standard Chartered on track for record profits in the first half of this year, up over 10 percent on a year earlier.

The Asia-focused bank today said income and profits were up over 10 percent in the first five months of the year and cost growth would be broadly in line with income growth in the first half.

"We are highly liquid, very well capitalised and have a firm grip of risks and costs," the banks said in a trading update.

Cost growth rising faster than income growth, known as "negative jaws", has dogged StanChart for the past year as it battles rivals such as HSBC to keep and retain talent in key fast-growing Asian markets such as China and Hong Kong. Analysts had expected costs to outpace income again in the first half and be broadly flat for the full year.

The London-headquartered bank, which makes over four-fifths of its profits in Asia and other emerging markets, said it cut the number of employees in the first five months, but did not give details. In May, finance chief Richard Meddings said it had cut 800 staff in the first quarter, after adding 7,000 staff last year to give it 85,000 employees.

A strong performance in Hong Kong, Singapore, Malaysia, China and Indonesia helped offset a weaker showing from India - which was its biggest market last year - and Africa, the bank said.

The bank is expected to make a profit of $6.9 billion this year, up 13 percent from $6.1 billion last year, according to the average of 22 analysts polled by Thomson Reuters. That would mark a ninth successive year of record profit.

Analysts expect it to report a 10 percent rise in first-half profits to $3.44 billion.