LONDON - Standard Chartered posted a slight increase in annual net profit on Tuesday, as the British bank’s fast-growing businesses in emerging economies offset a $667 million fine in the United States connected to illegal money transfers.
The London-based bank said its net income was $4.8 billion last year, less than a 1 percent rise compared to 2011. Revenue rose 8 percent, to $19.1 billion, over the same period. The earnings are the tenth consecutive year that Standard Chartered has reported a yearly increase in its profit.
The British bank’s vast operations across Asia, Africa and the Middle East helped protect it from many of the problems affecting developed economies, such as the United States and Europe.
Yet the bank’s chief executive, Peter Sands, acknowledged on Tuesday that the large financial penalties agreed with American authorities last year related to illegal money transfers for Iranian and Sudanese banks and corporations had hurt the bank.
The bank said it hadtaken steps, including the appointment of several new non-executive board members, to improve how it dealt with these issues in the future.
“The $667 million settlements dented our profit growth and damaged our reputation,†Mr. Sands said in a statement on Tuesday. “There is no single tool to reinforce culture, no magic recipe, and no organization of nearly 90,000 people can ensure that everyone does everything perfectly all the time.â€
The bank’s share price rose 2.7 percent in early morning trading in London on Tuesday.
Despite the cloud created by the U.S. fines, Standard Chartered has continued to expand across emerging markets by taking advantage of a growing demand for financial services from both local companies and international entities looking to invest.
The British bank said its operating income in China, for example, grew 21 percent, to $1 billion, last year as it benefited from expanding its local branch network six-fold since 2003. Standard Charted said ! it was now active in 25 emerging economies where the bank’s annual growth was in double digits.
Mr. Sands cautioned, though, that the financial problems of developed economies were having an effect on emerging markets, as Western companies cut back on buying goods from countries like China and Indonesia.
“The underlying problems of the weaker euro zone countries have not gone away,†he added. “Our markets in Asia, Africa and the Middle East are not immune.â€
The bank said it remained well capitalized, with a core Tier 1 equity ratio, a measure of a bank’s ability to weather financial shocks, of 11.7 percent last year, a slight decline from 2011.
Standard Chartered added that it was increasing its shareholder dividend by 11 percent, to 84 cents, and that its return on equity rose 5 percent, to 12.8 percent, last year.
