Profits At Standard Chartered PLC Hit By $1bn Write-Down

Shares in Standard Chartered (LSE: STAN) (NASDAQOTH: SCBFF.US) jumped over 4% in trade today, continuing its recent recovery from a first quarter that disappointed the market.

An already acknowledged impairment charge of $1bn relating to its Korean operations aside, profit before own credit adjustment rose 4% to $4.09bn, from $3.94bn in H1 2012, while operating income also lifted 4% to $9.75bn against the comparative period.

However, with the impairment charge included, profits fell almost 16% to $3.3bn from $3.9bn at the half-time stage in 2012.

The bank did see customer advances increase by 3% to $292bn compared to $285bn in the second half of last year, though, while customer deposits were “marginally lower” at $381bn from $385bn in H2 2012.

Management acclaimed broad performance across its markets, highlighting excellent performances from Hong Kong, India and Africa — including pre-tax profit in Hong Kong of over $1bn for the first time in a six-month period. 25 markets saw income in excess of $50m, while a further 17 markets delivered double-digit growth.

Chairman Sir John Peace commented:

“These results demonstrate the diversity and resilience of our business. Despite a difficult external environment, we continue to support our clients’ growth aspirations. We have a strong balance sheet and ample liquidity. Income in both businesses accelerated in the second quarter and we have entered the second half of the year with good momentum. The Board remains confident for the long term.”

Despite the broadly positive news today, investors need to ask themselves some key questions amid further research before buying into the stock. For instance, is the bank’s impressive growth streak — built on the back of rapidly growing emerging markets — at an end? Are these fears priced into the shares?

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> Sam does not own shares in any of the companies mentioned. The Motley Fool owns shares in Standard Chartered.