StanChart Q1 profit beats estimates, gives bullish outlook

STANDARD Chartered’s first-quarter pre-tax profit rose 6 per cent, beating market expectations, as the emerging markets-focused lender benefited from rising interest rates and flagged a robust outlook.

Statutory pre-tax profit for StanChart, which earns most of its revenue in Asia, increased to US$1.5 billion in January-March, from US$1.4 billion a year earlier. This compared with the US$1 billion average estimate of 16 analysts as compiled by the bank.

The London-headquartered lender, which is focussed on Asia, Africa and the Middle East, said it now expects income growth this year to slightly exceed the previously guided 5-7 per cent range, underlining how banks’ prospects are being lifted by rising interest rates even as the global economic outlook grows murkier.

“We are on track to deliver 10 per cent return on tangible equity by 2024, if not earlier,” group chief executive Bill Winters said in the results statement on Thursday (Apr 28).

While the results indicated how rising rates are benefiting banks such as StanChart, they also showed indications that tougher times may lie ahead as slowing economic growth in the wake of the Covid-19 pandemic bites.

The lender took a US$107 million charge due to the ratings downgrade of Sri Lanka, and a further US$160 million charge on its exposure’s to China’s troubled real estate sector.