As a result of rising interest rates to control inflation, Standard Chartered posted a 6% profit increase for its first quarter, beating the forecast.
The London-based lender, which focuses on Asia, Africa, and the Middle East, now expects income growth to be slightly higher than earlier guidance of 5-7% this year, underscoring how the boost policy rate hikes are providing banks, even as the global economic outlook dims.
Following the earnings report, StanChart’s Hong Kong-listed shares rose more than 12% at one point, reaching their highest level since early March, while the market rose only 0.6%.
Highlights
- Investors welcomed a 27% rise in revenues in the bank’s financial markets business as its London-listed shares rose 10% in the early hours today.
- Between January-March, the bank reported a statutory pre-tax profit of $1.49 billion, up from $1.4 billion in the same period last year.
- Bill Winters, Group Chief Executive, said the group is on track to deliver a 10% return on tangible equity by 2024 if not earlier.
- Despite ongoing virus restrictions, the bank’s wealth management income declined 18% compared with a year ago due to the pandemic’s impact on its China branch network.
- The rating downgrade of Sri Lanka resulted in a $107 million charge, and the exposure to China’s real estate sector led to a $160 million charge.
- As a result of volatility in energy prices, the bank’s trading business generated 32% more income than a year ago.
After fixing the bank’s balance sheet and slashing thousands of jobs during his early years, Winters has attempted to restore growth while building a portfolio of digital assets.
