By Anshuman Daga and Lawrence White
SINGAPORE (Reuters) – Standard Chartered posted a 6% rise in first-quarter profit as the emerging-markets-focused lender benefited from higher interest rates as central banks around the world begin to tighten. fight against inflation.
The lender, which is focused on Asia, Africa and the Middle East, now expects revenue growth this year to edge slightly above the previously guided 5-7% range, underscoring how Banks’ outlook is improved by key rate hikes even as the global economic outlook darkens.
While the results indicated how such hikes are benefiting banks such as London-headquartered StanChart, they also showed signs that tougher times could lie ahead as war in Ukraine threatens to disrupt recovery. after the COVID-19 pandemic.
Statutory pre-tax profit for the bank, which derives most of its revenue from Asia, rose to $1.49 billion in January-March from $1.4 billion a year earlier. That compares to the average estimate of $1 billion from 16 analysts as compiled by the bank.
“We are on track to deliver a 10% return on tangible equity by 2024, if not sooner,” group chief executive Bill Winters said in the earnings release on Thursday.
Winters, who took office in mid-2015, has tried to restore growth while building a portfolio of digital assets in recent years after fixing the bank’s balance sheet and cutting thousands of jobs at the during his early years.
But the company’s share price halved during his tenure.
The pandemic continued to weigh on the bank’s business in China in particular, as the closures of its branches under ongoing restrictions led to an 18% decline in the bank’s wealth management revenue compared to last year. same period a year ago.
The results came a day after arch-rival HSBC suspended plans to buy back shares this year after reporting an unexpected hit to its capital as a cocktail of rising inflation, geopolitical tensions and economic weakness hit. hurt his prospects.
StanChart took a charge of $107 million due to Sri Lanka’s ratings downgrade, and an additional charge of $160 million on its exposure to China’s struggling real estate sector.
The bank’s trading business saw revenue up 32%, with its macro trading unit posting a record quarter as the bank benefited from volatile energy prices.
London-listed StanChart shares have lost 2% in the past year against a 10.4% rise for HSBC and a 24% fall for Barclays.
(Reporting by Anshuman Daga and Lawrence White; Editing by Kim Coghill)
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