Standard Chartered said it would pay staff $1.1 billion in bonuses in a red hot fight for talent after strong investment banking in its core Asian markets in 2009 helped fuel record profits.

The bank said on Wednesday it would give bonuses to management, unlike many of its London-listed rivals, but Chief Executive Peter Sands said he would give his $3.2 million bonus to charity.

Sands, who has led the bank for just over three years and steered it through the financial crisis better than most rivals thanks to strong capital and liquidity and resilient Asian markets, said it was right to pay for success.

The talent markets in our markets are very competitive, with a lot of competition for the best talent. We will remain competitive in the way we compensate people, Sands told reporters on a conference call.

Sands, whose bank has not received any direct state aid during the financial crisis, also said he expected to raise between $500 million and $750 million by listing the bank's shares in India in the first half of this year.

Standard Chartered posted a 13 percent rise in 2009 pretax profit to $5.15 billion, just ahead of an average forecast for $5.1 billion in a Reuters poll of analysts.

By 0920 GMT, Standard Chartered's London listed shares were up 2 percent at 16.22 pounds, its highest level for seven weeks and topping the UK blue-chip share leaderboard.

Mike Trippitt, an analyst at Oriel Securities, said the results were good, with trends in income, consumer banking and impairments positive for the group.

What is not going to happen is people reaching for the EPS (earnings per share) 2010 upgrade button, but then that's where we are in the cycle. They have come through the year with no government support and produced 9 percent income growth -- a good performance, he said.

Compensation compared to revenue was 32 percent for the year, down from 34 percent in 2008 and 36 percent in 2007, and below ratios of nearer 35 to 40 percent at most rivals.

The bank's bad debts jumped by half on the year to $2 billion, largely due to a jump in consumer loan losses in the Middle East to $285 million, up 60 percent as unemployment hit the United Arab Emirates. Loan losses across the bank fell in the second half of the year from the first half.


Profits in India topped $1 billion last year, the second country to do so after Hong Kong, and the plan to list in Mumbai will build on that, Sands said.

The point about the listing in India is about building our brand and profile in one of our most important markets, he said, adding that raising funds would help liquidity for the local listing.

The 48-year-old former McKinsey director -- an ardent Arsenal Football Club supporter whose wife Betsy Tobin is the author of historical novels -- said 2010 had started very strongly and was ahead of a year ago.

The main risk ahead was the pace of regulatory change, he said, but added that proposed Basel III capital changes should impact it less than its rivals.

Wholesale banking continued to drive growth, with 2009 profit of $4.1 billion, up over a third from 2008. The business includes typical investment banking activity such as debt and equity capital markets and foreign exchange, and other services to major corporate clients, such as loans and trade finance.

The consumer arm has fared less well due to the economic slowdown, rise in bad debts and as its business in Korea has struggled. Its profit fell a fifth to $867 million

Korea delivered a better performance in the second half of the year, and is expected to further improve this year.

The bank said the Middle East region would remain difficult due to problems in Dubai and credit problems elsewhere.

The bank's core Tier 1 ratio ended 2009 at 8.9 percent, better than expected and up from 7.5 percent a year earlier. (Additional reporting by Clare Jim in Hong Kong; editing by Dan Lalor and Karen Foster)