Thursday 02 May 2024 7:41 am
Standard Chartered Exceeds Analyst Profit Predictions with 25% Increase
Standard Chartered has outperformed expectations, reporting a 25% surge in profit driven by interest rate hikes and strong performances in its trading and wealth divisions.
The bank, focused on emerging markets, recorded a pretax profit of $2.13 billion (£1.7 billion) for the first quarter of 2024, up from $1.71 billion (£1.36 billion) in the same period last year. This performance surpassed the company’s analyst consensus estimate of $1.59 billion (£1.27 billion).
Like many other major banks, Standard Chartered benefited from higher interest rates globally since the previous year. This favorable environment continued into 2024, reflected in a five percent increase in its underlying net interest income to $2.42 billion (£1.93 billion) and a six basis point expansion in its net interest margin to 1.76 percent during the quarter.
The bank also saw strong results in its credit trading business, with operating income surging 38 percent, and its wealth solutions arm posting a 21 percent rise in income.
Chief Executive Bill Winters commented on the robust performance, highlighting its broad-based strength across segments, products, and markets despite ongoing uncertainties.
Winters, one of the longest-serving CEOs of a major UK bank, has been focused on revitalizing Standard Chartered’s share price and enhancing investor returns. While the share price has improved this year, it has declined significantly by nearly a third during his tenure, a situation Winters has openly criticized.
During his leadership, Winters has prioritized derisking the bank’s balance sheet, particularly after it faced substantial losses from bad loans following the financial crisis. The bank aims to achieve cost savings of around $1.5 billion (£1.2 billion) over the next three years and elevate its return on tangible equity above 11 percent by the end of 2024.
Standard Chartered’s shares experienced a notable 4.9 percent increase in Hong Kong trading following this positive financial report. Despite being headquartered in London, the bank generates most of its revenue from Asia, the Middle East, and Africa, with major hubs in Hong Kong and Singapore.
In recent times, Standard Chartered has navigated challenges such as losses linked to China’s commercial real estate downturn and strategic exits from certain markets to streamline its global operations.
