Dec. 5 (Bloomberg) -- Standard Chartered Plc, the only U.K. bank stock to rise this year, said 2007 profit will increase 25 percent and meet analysts' estimates even after a writedown.
The company is ``broadly comfortable'' with analysts' forecasts that pretax profit will be $3.96 billion, the London- based bank said today in a statement. It took a $46 million writedown on the Whistlejacket Capital Ltd. structured investment vehicle, and additional charges on the fund may reduce 2007 profit, the bank said on a conference call.
``It is not a profit warning, but at the margins this is slightly negative,'' said Simon Maughan, a London-based analyst at MF Global Securities Ltd. ``There will be hit on this year's numbers,'' said Maughan who has a ``neutral'' rating on the stock.
Standard Chartered, which gets most of its profit in Asia, said it will ``accelerate investment,'' with expenses increasing at the same rate as income. The bank spent more than $2.7 billion on acquisitions since 2006, including Hsinchu International Bank in Taiwan and Union Bank Ltd. in Pakistan. Its workforce in China has more than doubled to about 3,800.
Standard Chartered fell 0.1 percent to 1,855 pence at 10:06 a.m. in London trading, valuing the bank at 26 billion pounds ($53 billion). The stock is up 24 percent this year, the only gainer in the nine-member FTSE 350 Banks Index, down 19 percent.
Standard Chartered will take a $133 million charge on mortgage securitizations in Korea, it said. The company won't book a $120 million sale of an asset-management company in India this year as anticipated, Standard Chartered said. Operating profit before tax in Korea will show a ``moderate reduction'' from the year-earlier period, the company said.
`Acutely Vigilant'
The bank will be ``acutely vigilant for any signs of slowdown or deterioration impacting our markets,'' Chief Executive Officer Peter Sands said in the statement. A deterioration in the U.S. would have ``an impact'' on Asia, said Finance Director Richard Meddings on a conference call with reporters today.
Standard Chartered's net income will rise 18 percent to $2.7 billion this year, according to the median estimate of 10 analysts surveyed by Bloomberg.
``The underlying business showed some improvements, and that is probably good in this environment,'' said Neil Wesley, who helps manage 1.7 billion pounds ($3.5 billion) for London-based Morley Fund Management Ltd., including Standard Chartered. ``All in all, this is a positive.''
Thirteen analysts rate Standard Chartered ``sell'' or ``hold,'' according to data compiled by Bloomberg. They outnumber the 11 analysts who recommend buying the shares. Analysts' median price target is about 1,770 pence, less than yesterday's closing prices of 1,847 pence.
The stock has been lifted by speculation last month that Industrial and Commercial Bank of China Ltd., Bank of China Ltd. and China Construction Bank Corp. approached Temasek Holdings Pte about buying its 17.2 percent stake in the company, said Mona Chung, who helps manage $2.5 billion at Daiwa Asset Management Ltd. in Hong Kong. Temasek is Singapore's state-owned investment company.
