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StanChart Q1 profit doubles to US$1b as bad loans fall
[LONDON] Standard Chartered on Wednesday reported its first quarter profit nearly doubled from a year ago, sending its shares up more than 4 per cent as the emerging markets-focused bank brought losses from loans under control.
StanChart said it made a pre-tax profit of US$1 billion, up from US$589 million in the same period a year ago. The bank booked a US$198 million loan impairment charge, much less than the roughly US$500 million expected by analysts.
"This is an encouraging first quarter but we are not getting carried away," chief financial officer Andy Halford told reporters on a conference call.
StanChart's shares rose 4 per cent in London by 0843 GMT on Wednesday following the results announcement, the best performing stock in the European Stoxx index of major bank shares.
The bank's shares have risen 13 per cent in the year to date, with analysts saying it is among the best positioned of its peers to benefit from rising U.S. interest rates and stronger trade flows in Asia, where the bank has most of its business.
The bank is attempting to show investors it can return to growth, after a sweeping restructuring under CEO Bill Winters succeeded in cutting costs but also slashed revenues.
StanChart in recent years has worked to reduce some of its riskier exposures in countries like India, where in the years before Winters' appointment it had fuelled its growth with such lending.
The bank's core capital ratio rose to 13.8 per cent, making StanChart one of the best-capitalised major Europe-based banks and increasing the prospects of a return to dividend paying after it cut payouts for 2016 due to restructuring costs.