Unlock the Editor’s Digest free of charge
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.
Standard Chartered shares rose on Thursday after reporting higher than anticipated first-quarter outcomes on the again of upper rates of interest and progress in its wealth and banking enterprise.
Reported pre-tax revenue within the first quarter elevated 6 per cent yr on yr to $1.9bn, beating analysts’ expectations of $1.4bn, the London-based financial institution stated on Thursday. Its Hong Kong-listed shares jumped as a lot as 6 per cent within the afternoon session after the outcomes had been revealed.
“We delivered a strong set of results in the first quarter of 2024, with double-digit growth in income and positive operational leverage,” stated Bill Winters, the group’s chief government. “Business performance was strong and broad-based across our segments, products and markets in what continues to be an uncertain environment.”
The lender, which makes most of its income in Asia, significantly Hong Kong and Singapore, additionally made $234mn from a revaluation of forex positions in Egypt and hyperinflation in Ghana.
Winters has been underneath strain to show to shareholders that the financial institution is slicing prices and simplifying its construction. StanChart’s Hong Kong-listed shares are up 16.8 per cent over the previous yr, although they’ve nonetheless fallen greater than 40 per cent since Winters took over in June 2015.
The chief, who complained that the financial institution’s inventory value was “crap” in February, has began overhauling administration in current months.
In March, the top of StanChart’s funding financial institution Simon Cooper left the group, along with his position taken over by buying and selling boss Roberto Hoornweg in Dubai and Singapore-based Sunil Kaushal, head of Africa and the Middle East. The financial institution stated a number of senior roles could be eliminated with a view to minimize prices and complexity.
The financial institution can also be trying to find its subsequent chair when José Viñals steps down, sounding out UK political heavyweights Sir Charles Roxburgh and Sir Sajid Javid as potential candidates.
The lender performed a share buyback value $646mn as of May 1, in response to an trade submitting, a part of the financial institution’s $1bn buyback program introduced in February.
It booked a credit score impairment of $176mn within the first three months of the yr, primarily within the wealth and retail banking division. The financial institution took one other $10mn credit score loss impairment on its Chinese business actual property portfolio for the quarter, the results of a property disaster that started three years in the past, although different elements of the portfolio offset the loss.
StanChart stated it was decreasing its publicity to the Chinese actual property portfolio to $2.4bn as of March, down 40 per cent from the top of 2021, when the collapse of developer Evergrande triggered turmoil within the trade.
The financial institution stated its remaining China portfolio, excluding the property sector, remained “resilient” and that it was including publicity to sectors together with clear tech, electrical autos and superior manufacturing. Winters stated in an April put up on LinkedIn that he was assured about Asia’s long-term outlook and China’s transition to “new economy” industries.
The financial institution’s quarterly writedown was $165mn as of finish March, up from $20mn a yr in the past, attributable to losses in wealth and retail banking and a $28mn cost in ventures primarily from Mox, an online-only Hong Kong financial institution majority-owned by StanChart.