Standard Chartered beats profit estimates as higher interest rates boost income
Standard Chartered posted higher-than-expected profits after a boost to income from higher interest rates and a strong performance in its trading business.
The bank, which earns most of its revenue in Asia, saw a 6 per cent increase in its reported pre-tax profit of $1.9billion in the first quarter.
This compared with $1.81billion the previous year and beat analyst estimates of $1.4billion.
Asia-focused lender Standard Chartered beat profit estimates for the first quarter
‘We delivered a strong set of results in the first quarter of 2024, with double digit growth in income and positive operational leverage,’ said CEO Bill Winters.
‘Business performance was strong and broad-based across our segments, products and markets in what continues to be an uncertain environment.
‘We remain confident in the delivery of our financial targets and are maintaining our full year 2024 guidance.’
Pre-tax profit in its corporate and investment banking division increased 13 per cent, with its markets and retail businesses also reporting rises of 10 and 8 per cent respectively.
This helped to offset higher credit impairment charges which rose to $165million, up from $20million the previous year.
The bulk of this came from the bank’s wealth and retail division, after being hit by ‘mortgage headwinds’ in Hong Kong and South Korea.
The bank also took a hit from its stake in China Bohai Bank, with profits down from $18million to $6million, as the country struggles amid a sluggish economic recovery.
StanChart said it had made provisions worth $1.2billion in relation to the China commercial real estate sector, with its credit exposure now at $2.4billion.
Shares in Standard Chartered were up 8.17 per cent or 56.80p to 751.80p on Thursday afternoon.
It will be a much welcome boost for the bank after CEO Bill Winters complained in February that the bank’s share price was ‘crap’.
StanChart’s latest results come after a busy period for London-listed banks, with most major banks reporting in recent weeks.
HSBC, which also makes the majority of its profits in Asia, reported quarterly profit slightly ahead of forecasts this week.
However other UK banks have suffered from sharp drops in earnings as increased competition for savings and mortgage products have squeezed margins.
Natwest and Lloyds both reported a 28 per cent drop in profits in the first quarter, while Barclays posted a fall of 12 per cent.