Standard Chartered today cautioned that growth in the first half of the year had been checked by global uncertainty in the past few weeks as the Greek debt crisis hit investor sentiment.
The result would be that its income in the six months to the end of June would be flat on a year ago while margins had fallen.
The announcement made the bank one of the biggest fallers in the FTSE 100, with shares down 18.5p, or 1 per cent, at £17.23.
Chief executive Peter Sands said: “In recent weeks increased economic uncertainties and weaker market sentiment have resulted in softer client demand for certain products and a subdued trading environment. This has had an impact on both client and own account income momentum.”
Mr Sands emphasised that the bank, which is based in Britain and has operations in Asia, Africa and the Middle East, had continued to win market share and that income in the second half of the year would grow at double digits from a year ago.
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“Standard Chartered is tracking towards another strong performance in the first half of 2010 ... Economic conditions continue to improve across our geographies and business activity levels are increasing, although recent market volatility has had some impact on sentiment. Despite this, we are performing well and taking market share.”
He said that margins would be lower in the first half compared with last year, caused by weaker revenue from its trading and by the need to hire extra staff in wholesale banking. Investment in the business was delayed in the first half of last year as a consequence of the global financial crisis.
The bank said that its balance sheet remained strong with an improving quality of loans, limited exposure to “problem” asset classes and no direct exposure to sovereign debt in southern Europe. It expected bad loan write-offs in the first half to be less than half the levels experienced a year ago.
The bank helped to bolster its finances in April and this month by raising $4 billion (£2.6 billion) in bonds. This month it became the first foreign bank to list in India, placing Indian Depository Receipts on the Bombay stock exchange.