By Anshuman Daga and Lawrence White
SINGAPORE (Reuters) – Standard Chartered’s first-quarter pre-tax profit rose 6%, beating market expectations, as the emerging markets-focused lender benefited from rising interest rates and flagged a robust outlook.
Statutory pretax profit for StanChart, which earns most of its revenue in Asia, increased to $1.49 billion in January-March, from $1.4 billion a year earlier. This compared with the $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% 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% return on tangible equity by 2024, if not earlier,” Group Chief Executive Bill Winters said in the results statement on Thursday.
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 $107 million charge due to the ratings downgrade of Sri Lanka, and a further $160 million charge on its exposure’s to China’s troubled real estate sector. (This story refiles to correct name in byline)
(Reporting by Anshuman Daga and Lawrence White; Editing by Kim Coghill)