StanChart tops forecasts on Asia growth, shares rise

LONDON (Reuters) - Standard Chartered Plc beat analysts' forecasts with a 31 percent jump in first-half profit, as growth in Asia continued to outpace western economies and its wholesale banking arm grew strongly.

Shares in the bank (STAN.L) (2888.HK), which makes three-quarters of its profit in Asia, rose 4.7 percent to 1,490 pence by 0940 GMT, one of the top performers in a strong UK share market .FTSE which was up 1.4 percent.

Pretax profit for the six months to the end of June reached $2.59 billion, surpassing the average $2.39 billion which analysts expected from StanChart according to a Reuters poll.

"Standard Chartered has been the darling of the UK banking sector for some time now and these numbers will no doubt further cement the positive general consensus," said Richard Hunter, head of UK equities at stockbroker Hargreaves Lansdown.

The bank -- whose shares have outperformed the UK sector .FTASX8350 by 43 percent through the past 12 months -- expects growth in most countries in its Asia, Middle East and Africa footprint to moderate, but said it should stay well ahead of growth elsewhere.

"We are in the right markets at the right time, doing the right things," Chief Executive Peter Sands told reporters on a conference call.

STRONG GROWTH

"We expect a bit of a slowdown in most of our markets relative to the pace at which they've been travelling. But they will still be travelling at GDP growth rates well in excess of what would be regarded as pretty fast growth rates for Western markets," Sands said.

"Many of our markets we anticipate to grow at rates of 6, 7 or 8 percent through this year and into 2009."

Standard Chartered was also in a good position to grab market share and hire talent, he said. Market turbulence could throw up acquisition opportunities, but organic growth remained the "fundamental driver" of strategy.

Standard Chartered's wholesale bank posted a 38 percent jump in operating profit to $1.65 billion and Sands said it had a strong order book entering the second half.

Its consumer bank's profit nudged 2 percent higher to $802 million, better than some forecasts but held back by the impact of falling interest rates and an 11 percent rise in bad debts.

Profits in Korea, where Standard Chartered made its biggest ever acquisition in 2005, rose 7 percent as a strong performance in wholesale banking outweighed a drop in consumer banking. Sands said he was optimistic a turnaround in Korea was on track.

The bank's acquisition of American Express Bank last year to bulk up its private bank business would deliver more cost savings than previously expected. Sands said annual cost savings should be "tens of millions" of dollars higher than the $100 million the bank had targeted by 2009.

(Editing by David Cowell and David Holmes)