Efforts by Standard Chartered to keep its 6,000 staff in Hong Kong “out of trouble” by helping them to deal with the national security law imposed on the territory by Beijing appear to be working.
Bill Winters, 59, boss of the FTSE 100 bank, said that its employees had not had any incidents linked to the legislation, which came into effect in the former British colony in June last year, and added that the mood in the group’s office there was “very good”.
“What we’re doing to protect our staff is to make sure that they understand the law, as much as any of us understands how a new law is being implemented,” Winters, said from Hong Kong as the bank reported first-half results. “We can help them to understand how they can stay out of trouble.”
The law alarmed politicians in the West, as Beijing seeks to tighten its grip on Hong Kong and to crack down on pro-democracy activists there. It poses problems for British companies such as Standard Chartered with extensive operations in the region. The London-based bank, which employs 85,000 people worldwide, is focused on the emerging economies of Asia, Africa and the Middle East and counts Hong Kong as its single biggest market. The lender and HSBC, its British rival, which also is reliant on Hong Kong, faced anger from British politicians last year for publicly endorsing the introduction of the legislation.
Beijing has responded to international pressure with a plan to introduce new legislation in Hong Kong that would penalise businesses that adhere to western sanctions on China. This could pose further difficulties for British companies in the territory, but Winters said that Standard Chartered had been operating in markets “with shifting laws” for a long time and that it had “found a way to navigate around these challenges that come up”.
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Pre-tax profits in the six months to the end of June climbed by more than expected, by 57 per cent to $2.6 billion compared with a year earlier, when the group had been hit by almost $1.6 billion provisions for expected loan losses from the pandemic.
It has been buoyed by the economy as it rebounds from Covid-19 and it followed other British banks in releasing cash — $47 million in the period — that it had set aside for bad loans. Its business in Asia recovered strongly, with profits rising by 44 per cent to $2.2 billion and accounting for most of its earnings.
Like its rivals, it reinstated its interim dividend, announcing a three cents-a-share payout and a $250 million share buyback, its second this year. The Bank of England blocked Britain’s biggest lenders from paying dividends last year because of the pandemic, but removed its restrictions last month.
Underlying operating income slid by 5 per cent to $7.6 billion as rock-bottom interest rates around the world dragged on the group. However, the bank expects income to grow at an annual rate of between 5 per cent and 7 per cent from next year.
Shares in Standard Chartered rose by 4¼p, or 1 per cent, to 441p.
