Standard Chartered shares jump to six-month high as bank breezes past profit estimates
Standard Chartered has sailed past estimates with a 25 per cent jump in profit on the back of interest rate hikes and a solid performance from its trading and wealth divisions.
The news sent its shares up 6.7 per cent in London to their highest level since October.
The emerging markets-focused lender reported a pretax profit of $2.13bn (£1.7bn) for the first three months of 2024, up from $1.71bn (£1.36bn) in the same period last year.
Its earnings beat a company-compiled analyst consensus estimate of $1.59bn (£1.27bn).
Like other major lenders, Standard Chartered received a boost from higher interest rates across the world since last year.
The bank has seen this tailwind continue into 2024 as its underlying net interest income – the gap between what it earns from loans and pays out on deposits – rose five per cent to $2.42bn (£1.93bn) during the quarter. Its net interest margin widened by six basis points to 1.76 per cent.
Standard Chartered was also helped by a strong performance in its credit trading business, which saw operating income surge 38 per cent during the quarter. Its wealth solutions arm also posted a 21 per cent rise in income.
Chief executive Bill Winters said: “Business performance was strong and broad-based across our segments, products and markets in what continues to be an uncertain environment.”
Winters, the longest-serving CEO of a major UK bank after taking the reins in June 2015, is trying to inject life into Standard Chartered’s struggling share price and boost investor returns.
Despite improving this year, Standard Chartered’s share price has slumped nearly a third during Winters’ tenure. The boss lamented the bank’s “crap” share price when it published its 2023 results in February.
Much of his tenure has been spent derisking the bank’s balance sheet after it took on billions in bad loans following the financial crisis.
The bank plans to save around $1.5bn (£1.2bn) in expenses over the next three years and raise its return on tangible equity, an key measure of profitability, above 11 per cent by the end of 2024.
Standard Chartered’s shares rose 4.9 per cent in Hong Kong on Thursday.
Despite its headquarters and primary stock listing being in London, Standard Chartered makes nearly all of its revenue in Asia, the Middle East and Africa, with hubs in Hong Kong and Singapore.
Last year, the bank was hit by losses tied to China’s commercial real estate crisis and exited markets in sub-Saharan Africa and Jordan as part of efforts to streamline its global operations.
Updated with shares