While most places are struggling, SocGen included, Standard Chartered isn’t. It’s doing quite well. As the chart below, taken from today’s results, shows, it increased revenues in its global markets business by 8% year-on-year in the first half. This was quite an achievement in an environment where most other banks have suffered double digit falls.
How did Standard Chartered achieve this? It points to strong growth in rates as clients sought to hedge increasing interest rates, to strong growth in corporate finance, to strong growth in asset liability management, and to particularly strong growth in its principal finance (private equity) business. It also points to strong growth in its wholesale banking business in the particular geographical markets it focuses on – namely Asia, Africa, and the Middle East.
The hottest market for Standard Chartered so far in 2012 has been Kenya, where revenues are up 57% on the back of strong rates and transaction banking activity. This was followed by Korea and Malaysia, where revenues rose an impressive 41%. Perversely, the UK and Europe came next, with a revenue increase of 25%. However, Standard Chartered stresses that any growth in Europe was not due to activities in UK and European markets, but to…
“…facilitating trade and investment between Europe and the Americas and our core markets. We are helping German companies sell cars in China; Indian companies make acquisitions in the UK; and US or French companies raise capital from Asian investors.”
Elsewhere, Standard Chartered’s wholesale banking revenues rose by 25% in China, by 14% in Hong Kong, by 11% in the UAE, by 10% in Taiwan, and by 5% in Singapore. They declined 13% in India.
Conclusion: try Kenya, Korea, or Malaysia. Or sell yourself to Standard Chartered in London, emphasising your emerging markets contacts.
Standard Chartered says it’s uniquely placed to facilitate the explosive growth in trade and investment between China and Africa. (Standard Chartered)
UBS believes there are sufficient synergies between its investment bank and wealth-management businesses to justify sometimes failing to cover its cost of capital in the investment bank. Not everyone buys this .(WSJ)
In the first quarter, SocGen did very well in FICC. In the second quarter, it didn’t. (Financial News)
SocGen has cut 14% of its investment bankers this year, but second quarter net income still fell 14% year on year. (Bloomberg)
Deutsche admits that a “limited number” of its staff were involved in Libor fixing. (Guardian)
Deutsche is too bloated to remain competitive in the long term, says Handelsblatt. (Spiegel)
No more job cuts planned at Tullet Prebon. (Financial News)
Reports of very bad analyst bonuses this year. (Wall Street Oasis)
“If you want to work a nine-to-six day, you won’t survive [in private equity],” says a woman in private equity explaining why there are so females in the industry. (BVCA)
The Pacific Ocean is becoming caffeinated. (Grist)