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UPDATE 2-StanChart says too early to call sustained recovery

Published 10/29/2009, 05:48 AM
Updated 10/29/2009, 05:51 AM
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* Says makes good progress in Q3

* Sees Asian economies rebounding

* Still considering listing in India, China

* Shares ease 0.7 percent

(Adds CEO quote, share price, details)

By Kirstin Ridley

LONDON, Oct 29 (Reuters) - Standard Chartered Plc, the Asia-focused bank that is successfully negotiating the credit crisis, said it was benefiting from growth across its franchises but cautioned the economic outlook remained fragile.

In its third-quarter trading statement published on Thursday, the bank said its key wholesale division -- which caters to corporations, other banks and government agencies -- had seen continued strong income performance, although competitor activity was increasing.

Its consumer banking business, which has been hit by higher loan losses, lower margin lending and less demand for investment products, saw sustained income with strong mortgage performance, cost discipline and improving portfolio credit quality.

"Although economic data and the underlying environment are improving, it remains too early to call a sustained recovery and we remain cautious on the outlook," said Chief Executive Peter Sands.

"However, it is ever clearer that our markets in Asia, Africa and the Middle East are emerging more quickly and stronger than a number of markets in the West."

The bank provided no numbers and shares eased by around 0.7 percent to 14.73 pounds in morning trade.

But some analysts had upgraded 2009 and 2010 earnings-per-share forecasts ahead of the statement, hoping for a sustained Asian economic recovery, continued robust growth of the bank's wholesale division and a relatively low bad loans tally.

Standard Chartered kicks off the earnings season for London-listed banks, although it stands far apart. Its limited exposure to western economies has helped it weather the worst of a credit crisis that forced states to bail out some rivals.

Those European rivals -- many of which are restructuring, retrenching and slashing asset portfolios as a payback for government aid -- have left the field free to operators like Standard Chartered, which wants to expand further in fast-growing emerging markets and Asia that already contribute more than 90 percent of profits.

Standard Chartered raised 1.01 billion pounds ($1.7 billion) in new shares in August and has been casting its eye over Asian assets, but exclusive talks with the UK's Royal Bank of Scotland about buying retail and commercial assets in China, India and Malaysia ended earlier this month without a deal. (Editing by David Holmes) ($1=.6081 Pound)

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