Booming markets in Asia get Standard off to a record start

The London-based bank, which generates more than four fifths of its profit in Asia and other emerging markets, said it had its best ever January and expects revenue to grow by at least 10 per cent this year and beyond.

It made a pre-tax profit of $6.12bn last year, a new high for the eighth year in a row and in line with forecasts, as a sharp drop in bad debts more than offset a rise in wage costs.

But the bank warned banking regulations were becoming more fragmented than coordinated and said it was “relatively cautious” on the outlook for the world economy.

“The bank is very well positioned, and while we won’t see the kind of jump we saw last year, it is still going to be fairly good growth,” said an analyst.

A UK fund manager said the bank was the best in Britain in terms of its geographical focus and management skills and he was relaxed about the cost inflation.

“We have been here before and the company is well managed enough... this is a business that has the underlying growth to stand a bit of expansion and rise in costs,” the investor said.

Chief executive Peter Sands said the bank started the year with good momentum but faces a battle to attract and retain staff in its hot Asian markets, as local banks become more capable and with international banks “returning to the fray”.

“We are seeing the war for talent across most of our markets in Asia, Africa and the Middle East, and it is very acute in India and China where a quarter of our staff are based,” Mr Sands said.

Costs rose 13 per cent last year, outpacing a 6 per cent rise in income, as higher wage costs were added to by more investment after the bank slowed spending in 2009. Costs rose to 55.9 per cent of 2010 revenue from 51.3 per cent.

It said its bonus pool for staff rose to $1.19bn from $1.1bn and total staff costs increased 17 per cent as it paid top dollar to snag several high-profile hires.

The bank last year added about 7,000 staff, or 9 per cent more, but Sands said it will only add about 1,000 this year to its 85,000 employees.

It said it plans to keep cost growth at the same rate as income growth this year after the step up in spending in 2010.

Meeting tougher regulatory requirements cost about $150m extra last year, said the bank, which sponsors Liverpool Football Club.