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"Rather than seeing increasingly global coordination and consistency of regulation, we are seeing increased fragmentation and unilateral action. For example, the U.K.'s recent announcement that the bank levy will be implemented in full during 2011 means that the levy will cost us around $180 million post-tax this year." Analysts at Investec said "the drag of higher equity and the lack of tax deductibility on the (U.K.) levy means return on equity will be lower" this year. They estimated it could drop from 14.1 percent this year to 12.3 percent. "Over the last seven years, Standard Chartered has raised $11.6 billion in equity, 1.5 times more than the stock has paid out in dividends," said Bruce Packard, analyst at Seymour Pierce. "Given the growth opportunities, management should be given the benefit of the doubt over this dilution and the double digit cost growth
-- though we are nervous about how well management might be able to call the cycle," Packard said. Wednesday's news closed the reporting season for U.K. banks. HSBC Holdings more than doubled its net profit from $5.8 billion to $13.2 billion and Barclays PLC raised its profit from 2.63 billion pounds ($4.3 billion) to 3.56 billion pounds. RBS, Britain's largest government-owned bank, missed analysts expectations with a 1.1 billion pound full-year loss and Lloyds Banking Group, which is 41 percent government owned, reported a full year loss of 258 million pounds after a 2.9 billion pounds profit in 2009.
[Associated
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