* 2012 pretax profit up 1 pct to $6.9 bln
* Bonus pool cut by 7 percent to $1.4 bln
* CEO bonus cut 10 pct to $3.15 million
* Bank says tougher regulations cost well over $500 mln/year
* Shares up 2.8 pct, outperform peers
By Steve Slater and Matt Scuffham
LONDON, March 5 Standard Chartered
notched up a tenth successive rise in annual profit,
with a 1 percent gain that was capped by the bank's big fine for
breaking U.S. sanctions on Iran and rising regulatory costs.
London-listed Standard Chartered, which has benefited from
Asia's boom through the last decade, said new regulations
including tougher liquidity and capital rules and a UK bank tax
were costing it "well north" of $500 million a year, and could
be near $800 million.
Many banks have said extra global regulations, brought in to
make them safer after the 2008 financial crisis, are hurting
profitability and could restrict their lending. But few have
quantified the impact on their bottom line.
A European Union proposal to cap bankers' bonuses at double
their salary was also a worry, the bank said.
"We are concerned about it because we are a global bank and
97 percent of our staff are outside the EU and we're concerned
about our ability to be competitive in attracting and retaining
talent," Chief Executive Peter Sands said.
Asked if it could prompt the bank to leave London, he said
it was "too early to draw conclusions on what action we would
take as we don't know what we are dealing with."
Standard Chartered said it had cut its 2012 bonus pool by 7
percent from a year before to $1.43 billion, after it was fined
$667 million by U.S. regulators for breaching sanctions related
to Iran and three other countries.
Sands said his bonus would fall 10 percent to $3.15 million.
DECADE OF HIRING
The Iran-related fine was a rare blip after a decade of
growth and few problems for Standard Chartered. It was accused
of moving millions of dollars through the American banking
system on behalf of customers in sanctioned countries.
The bank reported pretax profit of $6.9 billion for 2012, up
from $6.8 billion in 2011 but just short of an average forecast
from analysts of $7 billion. It said it had started the year
well and had "a firm grip" on risk, costs and investment.
Its shares rose 2.8 percent by 0246 GMT, outperforming a 1.9
percent rise in the European bank index.
"Given the events of the past year it's quite a feat to
deliver a good set of boring results," said Simon Maughan,
analyst at Olivetree Securities. "It has put itself back on the
steady outperformer track ... they are back in their comfort
zone and get a premium valuation for that."
Standard Chartered, led by former McKinsey consultant Sands
for more than six years, added 2,200 staff in 2012 and has said
it could expand by a similar amount this year, although it plans
to keep any cost increase below its rise in income.
Its return on equity improved to 12.8 percent last year from
12.2 percent, but is still short of its medium-term target of 15
Regulation costs included a $174 million UK bank levy, which
it expects to rise to near $290 million this year. Holding extra
capital and stricter rules on how risk-weightings are calculated
cost $200 million or more.
The bank is most concerned about tougher rules on liquidity,
which Britain has introduced far before overseas rivals. "We
like being liquid, but the quantum of liquidity we now hold and
also the restrictions over the nature of what we can invest it
in, we would esimate as approaching $300 million of cost,"
Finance Director Richard Meddings said.
The bank's income in Malaysia, China and Indonesia grew by
more than 10 percent last year and it rose 10 percent in Hong
Kong, its biggest market, mirroring the strong performance there
by its rival HSBC on Monday.
Profit in India, one of its biggest markets, fell 16 percent
as the economy slowed and its currency weakened.
In Africa, profit jumped 23 percent to $771 million and the
bank said it is setting up a full subsidiary in Angola, the
first international bank to do so.
Angola is Africa's largest oil producer after Nigeria and
increasingly a target for international firms given its mineral
wealth and fast growth.