Financial Position Of Standard Chartered Bank United Kingdom Finance Essay

Standard Chartered has a history of over 150 old ages in the UK. Its central offices are based at 1 Basinghall Avenue, London, and both the CEO and Chairman situated here. Standard Chartered is regulated by the UK FSA and is one of the UK ‘s largest Bankss. It has been listed on the London Stock Exchange since 1969 and is presently a top 20 FTSE company and among the top five largest Bankss by market capitalization. In extra to the many Group maps based in the UK, London is a planetary fiscal Centre and a cardinal hub for Standard Chartered ‘s Wholesale Banking concern. It is besides hosts important Private Banking and International Banking operations.

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Standard Chartered is built on teamwork, partnership and the diverseness of our people. Standard Chartered employs about 60,000 people worldwide, stand foring over 100 nationalities. Today, our top direction is made up of over 50 nationalities. Diversity and Inclusion lies at the bosom of our values and is built-in to our journey to go the universe ‘s best international bank. Our diverse squads help to fuel creativeness and invention, back uping the development of advanced merchandises and services for our clients. Diversity and Inclusion is a cardinal portion of the Group ‘s civilization and remains a long-run precedence for Standard Chartered.

What the bank stands for:

Strategic purpose – The universe ‘s best international bank, Leading the manner in Asia, Africa and the Middle East

Brand promise – The Right Partner – Leading by Example

Valuess – Responsive Trustworthy Creative International Courageous Approach Commitment to stakeholders

What the bank stands for Engagement: Concentrating on attractive, turning markets, where it can leverage our relationships and expertness

Competitive Placement: Combining planetary capableness, deep local cognition and creativeness to surpass the rivals

Management Discipline: Continuously bettering the manner it works, equilibrating the chase of growing with house control of costs and hazards

The Peoples: Helping the people to turn, enabling persons to do a difference and squads to win

Communities: Trusted and caring, dedicated to doing a difference

Investors: A typical investing presenting outstanding public presentation and superior returns

Regulators: Exemplary administration and moralss wherever it is.

Standard Chartered employs about 60,000 people worldwide, stand foring over 100 nationalities. Today, its top direction is made up of over 50 nationalities. Diversity and Inclusion lies at the bosom of its values and is built-in to the journey to go the universe ‘s best international bank. Its diverse squads help to fuel creativeness and invention, back uping the development of advanced merchandises and services for its clients. Diversity and Inclusion is a cardinal portion of the Group ‘s civilization and remains a long-run precedence for Standard Chartered.

2008 was a twelvemonth of extraordinary disruption and break in fiscal markets. Banks collapsed or were rescued by authoritiess, markets fell sharply and economic growing stalled. Given the conservative concern theoretical account, Standard Chartered clear scheme and its focal point on the rudimentss, has weathered the storm comparatively good. It has non been unscathed but have continued to be unfastened for concern for clients and one time once more delivered record net incomes.

Bank ‘s top precedence is to speed up organic growing. This is the nucleus of their scheme, the cardinal driver of stockholder value creative activity. It stepped up investing in organic growing in 2006, making so once more in 2007. Good double-digit organic growing in both concerns is the cardinal driver of their public presentation. The bank continues to present on acquisitions. Acquisitions do play a function in the scheme, but it ‘s a encouraging function by purchasing platforms on which can present accelerated organic growing.

Performance high spots 2005

Income

Normalised net incomes per portion

States and districts

up 27 %

up 23 %

56

to $ 6,861m

to153.7cents

2004:56:00

2004: $ 5,382m*

2004: 124.6 cents*

Net income before revenue enhancement

Normalised return on ordinary

Nationalities

up19 %

stockholders ‘ equity

89

to $ 2,681m

18.00 %

2004: 80

2004: $ 2,251m

2004: 18.6 %

Entire assets

Dividend per portion

Employees

up 46 %

Up 11 %

43899

to $ 215bn

to 64.0cents

2004: 33,323

2004: $ 147bn*

2004: 57.5 cents

Year 2006

Operating income

Net income before revenue enhancement

Entire assets

Up 26 %

Up 19 %

Up 24 %

$ 8,620m

$ 3,178m

$ 266bn

2005: $ 6,861m

2005: $ 2,681m

2005: $ 215bn

Normalised net incomes per portion

Normalised return on ordinary stockholders ‘ equity

States and districts

Up 11 %

Up 16.9 %

56

170.7cents

2005: 18.0 %

2005:56:00

2005: 153.7 cents

Dividends per portion

Employees

Nationalities

Up 11 %

59,205

105

71.04cents

2005: 43,899

2005: 89

2005: 64.00 cents

Year 2007

Operating income

States and districts

Nationalities

$ 11,067m

57

115

2006 – $ 8,620m

2006 – 56

2006 – 105

2005 – $ 6,861m

2005 – 56

2005 – 89

Entire assets

Employees

$ 329bn

70,000

2006 – $ 266bn

2006 – 59,000

2005 – $ 215bn

2005 – 44,000

Year 2008

Operating income

Operating net income

Entire assets

$ 13,968m

$ 4,568m

$ 435bn

+26 % / 2007: $ 11,067m / 2006: $ 8,620m

+13 % / 2007: $ 4,035m / 2006: $ 3,178m

+32 % / 2007: $ 330bn / 2006: $ 266bn

Employees

States and districts

Nationalities

73,800

75

125

2007: 70,000 / 2006: 59,000

2007: 57 / 2006: 56

2007: 115 / 2006: 105

Normalised net incomes per portion

Normalised return on equity

Dividend per portion

174.9cents

0

61.62cents

+1 % / 2007: 173.0 cents / 2006: 149.4 cents

2007: 15.6 % / 2006: 16.9 %

+3.3 % / 2007: 59.65 cents / 2006: 53.40 cents

Amalgamate Statement Sheet for Standard Chartered Bank UK

Amalgamate Income Statement

2005

2006

2007

2008

Income

Interest income

8,750

12,987

16176

16378

Interest disbursal

-4,415

-7,659

-9911

-8991

Net involvement income

4,335

5,328

6265

7387

Fees and committee income

1,840

2,275

3189

3420

Fees and committee disbursal

-345

-394

-528

-479

Net trading income

769

920

1261

2405

Other runing income

262

491

880

1235

Entire non-interest income

2,526

3,292

4,802

6,581

Operating income

6,861

8,620

11,067

13,968

Staff costs

-2,145

-2,913

-3949

-4737

Premisess costs

-363

-444

-592

-738

General administrative disbursals

-1,020

-1,171

-1329

-1711

Depreciation and amortization

-283

-268

-345

-425

Operating disbursals

3,811

4,796

6215

7611

Operating net income before impairment losingss and revenue enhancement

3,050

3,824

4,852

6,357

Impairment losingss on loans and progresss and other recognition hazard commissariats

-319

-629

-761

-1321

Other damage

-50

-15

-57

-469

Net income / ( loss ) from associates

0

-2

1

1

Operating Net income

2,681

3,178

4,035

4,568

Rights issue option

0

0

0

233

Net income before revenue enhancement

2,681

3,178

4,035

4,801

Tax

-710

-824

-1046

-1290

Net income for the twelvemonth

1,971

2,354

2,989

3,511

Net income attributable to:

Minority involvements

25

76

148

103

Parent company ‘s stockholders

1,946

2,278

2841

3408

Net income for the twelvemonth

1,971

2,354

2989

3511

Amalgamate Balance Sheet for Standard Chartered Bank UK

Particulars

2005

2006

2007

2008

$ million

$ million

$ million

$ million

Assetss

Cash and balances at cardinal Bankss

8,012

7,698

10,175

24,161

Financial assets held at just value through net income or loss

10,333

15,715

22,958

15,425

Derivative fiscal instruments

9,370

13,154

26,204

69,657

Loans and progresss to Bankss

21,701

19,724

35,365

46,583

Loans and progresss to clients

111,791

139,330

154,266

174,178

Investing securities

37,863

49,487

55,274

69,342

Interests in associates

128

218

269

511

Goodwill and intangible assets

4,321

6,146

6,380

6,361

Property, works and equipment

1,644

2,168

2,887

3,586

Current revenue enhancement assets

0

764

Deferred revenue enhancement assets

498

538

559

660

Other assets

7,163

8,601

11,011

20,374

Prepayments and accumulated income

2,272

3,268

3,857

3,466

Entire assets

215,096

266,047

329,205

435,068

Liabilitiess

Deposits by Bankss

18,834

26,233

25,880

31,909

Customer histories

119,931

147,382

179,760

234,008

Fiscal liabilities held at just value through net income or loss

6,293

9,969

14,250

15,478

Derivative fiscal instruments

9,864

13,703

26,270

67,775

Debt securities in issue

25,913

23,514

27,137

23,447

Current revenue enhancement liabilities

283

68

185

512

Deferred revenue enhancement assets liabilities

0

176

Other liabilities

8,446

11,355

14,742

17,363

Accumulations and deferred income

2,319

3,210

3,429

4,132

Commissariats for liabilities and charges

55

45

38

140

Retirement benefit duties

476

472

322

447

Subordinated liabilities and other borrowed financess

10,349

12,699

15,740

16,986

Entire liabilities

202,763

248,650

307,753

412,373

Equity

Share capital

5,638

692

705

948

Militias and retained net incomes

6,244

16,161

20,146

21,192

Entire parent company stockholders ‘ equity

11,882

16,853

20,851

22,140

Minority involvements

451

544

601

555

Entire equity

12,333

17,397

21,452

22,695

Entire equity and liabilities

215,096

266,047

329,205

435,068

Important Financial Ratios Relevant for the Banking Industry

Ratios

2005

2006

2007

2008

LIQUIDITY RATIOS

Net Working Capital

Net Working Capital / Total Assetss

0.23

0.21

0.23

0.27

Current Ratio

Current Asset / Current Liablity

1.35

1.32

1.36

1.43

Capital ADEQUACY RATIO

*Networth = Equity portion capital + militias + excess

Capital Asset Ratio

*Net Worth / Total Assetss

5.52 %

6.33 %

6.33 %

5.09 %

Short Term Leverage Ratio

Short Term Borrowed Funds ( Non Deposit Funds ) / Entire Assetss

64.50 %

65.20 %

62.40 %

61.10 %

Net worth

11,882

16,853

20,851

22,140

PROFITABILITY RATIOS

Tax return on Equity

Net income after Tax / Net Worth

16.59 %

13.97 %

14.34 %

15.86 %

Tax return on Assetss

Net income after Tax / Total Assetss

0.92 %

0.88 %

0.91 %

0.81 %

Net Interest Margin

( Interest Income – Interest Expense ) / Entire Assetss

2.02 %

2.00 %

1.90 %

1.70 %

Interest Income Ratio

Interest Income / Total Assetss

4.07 %

4.88 %

4.91 %

3.76 %

Common Size Financial Statement for Standard Chartered Bank UK

Particulars

2005

2006

2007

2008

Assetss

Cash and balances at cardinal Bankss

3.72 %

2.89 %

3.09 %

5.55 %

Financial assets held at just value through net income or loss

4.80 %

5.91 %

6.97 %

3.55 %

Derivative fiscal instruments

4.36 %

4.94 %

7.96 %

16.01 %

Loans and progresss to Bankss

10.09 %

7.41 %

10.74 %

10.71 %

Loans and progresss to clients

51.97 %

52.37 %

46.86 %

40.03 %

Investing securities

17.60 %

18.60 %

16.79 %

15.94 %

Interests in associates

0.06 %

0.08 %

0.08 %

0.12 %

Goodwill and intangible assets

2.01 %

2.31 %

1.94 %

1.46 %

Property, works and equipment

0.76 %

0.81 %

0.88 %

0.82 %

Current revenue enhancement assets

0.00 %

0.00 %

0.00 %

0.18 %

Deferred revenue enhancement assets

0.23 %

0.20 %

0.17 %

0.15 %

Other assets

3.33 %

3.23 %

3.34 %

4.68 %

Prepayments and accumulated income

1.06 %

1.23 %

1.17 %

0.80 %

Entire assets

100 %

100 %

100 %

100 %

Liabilitiess

Deposits by Bankss

9.29 %

10.55 %

8.41 %

7.74 %

Customer histories

59.15 %

59.27 %

58.41 %

56.75 %

Fiscal liabilities held at just value through net income or loss

3.10 %

4.01 %

4.63 %

3.75 %

Derivative fiscal instruments

4.86 %

5.51 %

8.54 %

16.44 %

Debt securities in issue

12.78 %

9.46 %

8.82 %

5.69 %

Current revenue enhancement liabilities

0.14 %

0.03 %

0.06 %

0.12 %

Deferred revenue enhancement assets liabilities

0.00 %

0.00 %

0.00 %

0.04 %

Other liabilities

4.17 %

4.57 %

4.79 %

4.21 %

Accumulations and deferred income

1.14 %

1.29 %

1.11 %

1.00 %

Commissariats for liabilities and charges

0.03 %

0.02 %

0.01 %

0.03 %

Retirement benefit duties

0.23 %

0.19 %

0.10 %

0.11 %

Subordinated liabilities and other borrowed financess

5.10 %

5.11 %

5.11 %

4.12 %

Entire liabilities

100 %

100 %

100 %

100 %

Equity

Share capital

46 %

3.97

3.28

4.17

Militias and retained net incomes

90.90

92.80

93.91

93.37

Entire parent company stockholders ‘ equity

Minority involvements

3.65

3.12

2.80

2.44

Entire equity

100 %

100 %

100 %

100 %

Entire equity and liabilities

215,096

266,047

329,205

435,068

Trend Analysis of Financial Statement of Standard Chartered Bank UK

Particulars

2005

2006

2007

2008

Assetss

Cash and balances at cardinal Bankss

100 %

96.08 %

132.18 %

237.45 %

Financial assets held at just value through net income or loss

100 %

152.09 %

146.09 %

67.19 %

Derivative fiscal instruments

100 %

140.38 %

199.21 %

265.83 %

Loans and progresss to Bankss

100 %

90.89 %

179.30 %

131.72 %

Loans and progresss to clients

100 %

124.63 %

110.72 %

112.91 %

Investing securities

100 %

130.70 %

111.69 %

125.45 %

Interests in associates

100 %

170.31 %

123.39 %

189.96 %

Goodwill and intangible assets

100 %

142.24 %

103.81 %

99.70 %

Property, works and equipment

100 %

131.87 %

133.16 %

124.21 %

Current revenue enhancement assets

100 %

0.00 %

0.00 %

0.00 %

Deferred revenue enhancement assets

100 %

108.03 %

103.90 %

118.07 %

Other assets

100 %

120.08 %

128.02 %

185.03 %

Prepayments and accumulated income

100 %

143.84 %

118.02 %

89.86 %

Entire assets

100 %

1551.14 %

123.74 %

132.16 %

Liabilitiess

Deposits by Bankss

100 %

139.29 %

98.65 %

123.30 %

Customer histories

100 %

122.89 %

121.97 %

130.18 %

Fiscal liabilities held at just value through net income or loss

100 %

158.41 %

142.94 %

108.62 %

Derivative fiscal instruments

100 %

138.92 %

191.71 %

257.99 %

Debt securities in issue

100 %

90.74 %

115.41 %

86.40 %

Current revenue enhancement liabilities

100 %

24.03 %

272.06 %

276.76 %

Deferred revenue enhancement assets liabilities

100 %

0.00 %

0.00 %

0.00 %

Other liabilities

100 %

134.44 %

129.83 %

117.78 %

Accumulations and deferred income

100 %

138.42 %

106.82 %

120.50 %

Commissariats for liabilities and charges

100 %

81.82 %

84.44 %

368.42 %

Retirement benefit duties

100 %

99.16 %

68.22 %

138.82 %

Subordinated liabilities and other borrowed financess

100 %

122.71 %

123.95 %

107.92 %

Entire liabilities

100 %

122.63 %

123.77 %

133.99 %

Equity

Share capital

100 %

12.27 %

101.88 %

134.47 %

Militias and retained net incomes

100 %

258.82 %

124.66 %

105.19 %

Entire parent company stockholders ‘ equity

100 %

141.84 %

123.72 %

106.18 %

Minority involvements

100 %

120.62 %

110.48 %

92.35 %

Entire equity

100 %

141.06 %

123.31 %

105.79 %

Entire equity and liabilities

100 %

263.69 %

247.08 %

239.79 %

Summarization:

Standard Chartered has been turning strong on its fiscal public presentation each twelvemonth of growing. The public presentation was peculiarly delighting as it came in a twelvemonth of planetary fiscal turbulence.

The Group has non escaped unscathed from the biggest fiscal crisis of our times, but a steadfast clasp on the basic foundations of banking – liquidness, capital, hazard and cost direction – enabled it to get away the worst of the convulsion and stand out in the planetary fiscal landscape. Its most recent twelvemonth ‘s public presentation can be summed up by the undermentioned accomplishments:

• Strong net incomes: The Group delivered another set of strong fiscal consequences, measured by a 26 per cent growing in Group income to about $ 14 billion and a 13 per cent rise in operating net income to $ 4.6 billion, despite the troubles faced in the external concern environment.

• Firm foundations: The foundations of the Group remain in first-class status. The capital place has been strengthened further by a successful rights issue which closed in December.

The Bank is besides really liquid, profiting farther from a strong influx of sedimentations ; the balance sheet is in first-class form ; and the Group has a steadfast appreciation on hazards and disbursals.

• Strongly positioned: With the strong foundations coupled with the diverseness of the concern, both by geographics and merchandise as a consequence of selective acquisitions, has positioned it good to confront the go oning challenges of intensifying economic turbulency in 2009.

Strong net incomes

The Group ‘s income was driven by strong impulse in Wholesale Banking where income grew by 43 per cent. Organic growing was once more the driver of income growing, presenting $ 2.3 billion out of the entire $ 2.9 billion addition in income. Excluding the acquisition of American Express

Bank ( AEB ) in 2008, Group income rose by 21 per cent, reflecting the strength of its implicit in concern. Its disciplined direction of disbursals was demonstrated in the 2nd half of 2008 as the Bank reduced costs in expectancy of the lag in Asia, Africa and the Middle East caused by the banking crisis in the West. Overall, growing in disbursals was less than income growing, at 22 per cent. Excluding AEB, disbursals rose by 13 per cent, once more significantly less than the implicit in growing in income.

Firm foundations

Standard Chartered ‘s strong balance sheet is a cardinal beginning of its competitory strength. The Bank ‘s capital and liquidness profile reflects the fiscal wellness of the Group. In the recent convulsion, the Bank has proven to be a ‘flight-to-quality ‘ establishment as it continued to pull significant sedimentation growing in both Wholesale Banking and Consumer Banking concerns. The Group ‘s sedimentation base grew 30 per cent through 2008.

The direction ‘s focal point on sedimentation growing and its disciplined deployment of the balance sheet resulted in the ratio of client loans to client sedimentations, the progresss to sedimentations ratio,

bettering from 86 per cent at the terminal of 2007 to 75 per cent at the terminal of 2008. At the terminal of 2008, the ratio remained under 100 per cent in all of its major markets. In a planetary economic system starved of liquidness, Standard Chartered remained a net interbank loaner in the money markets and continued to impart to its clients. Loans and progresss to clients increased by $ 22 billion to $ 179 billion.

The Group ‘s loaning portfolio is diversified over a broad scope of merchandises, industries and client sections. The conservative nature of the Group ‘s balance sheet is further evidenced through the limited exposure to higher-risk plus categories and sections. Asset backed securities accounted for less than one per cent of Group assets. Exposures to commercial existent estate, leveraged loans and illiquid assets are besides highly modest. The Group ‘s capital place, already strong before the oncoming of the planetary fiscal crisis, continued to better and remains good above its declared marks. Core Tier 1 capital, at 7.6 per cent, Tier 1 capital at 10.1 per cent and entire capital at 15.6 per cent of hazard weighted assets are good above its declared marks.

The Financial Statements from 2005 – 2008

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