The earnings update showed how rising central bank rates have boosted revenue, as StanChart charged borrowers more interest while not passing all of the increase to depositors. StanChart, which earns most of its revenue in Asia, said January-March statutory pretax profit reached $1.81 billion. That compared with $1.49 billion a year earlier and the $1.43 billion average of 14 analyst estimates compiled by the bank. It was StanChart's largest single-quarter profit since the start of 2014 despite its biggest income earner - financial markets trading - seeing weaker activity compared with last year when markets experienced record volatility. The bank's shares opened flat in early trading in London, outperforming a sagging STOXX European banks index which fell 0.4%. "All-in, we see this as a solid set of results, and would expect a broadly neutral share price reaction," analysts at Goldman Sachs said. Standard Chartered said income in its corporate cash management business tripled due to "strong pricing discipline and passthrough rate management".
Retail banking income rose 53%, propelled by deposit income
which also tripled to $771 million.
The robust earnings echoed resilience at U.S. banks which
reported results earlier this month, as the sector weathered a
global confidence crisis following the collapse of Silicon
Valley Bank and Credit Suisse Group AG .
European rival UBS Group AG on Tuesday said it
would gird itself for the "hard" task of swallowing fallen
compatriot Credit Suisse, which registered 61 billion Swiss
francs ($68.49 billion) of asset outflows in the first quarter.
StanChart has had "no contact" recently from First Abu Dhabi
Bank PJSC , Chief Financial Officer Andy Halford told
reporters, after the United Arab Emirates-based lender
re-ignited StanChart takeover speculation in January by
confirming it had considered making a bid.
The lender could complete the disposal of its aviation
finance business, which has a fleet worth some $3.7 billion and
has been earmarked for sale since January, as soon as the next
financial quarter, Halford said.
CHINA STABLE
Not all of StanChart's update was positive, with expenses
rising 5% due to inflation as well as hiring for strategic
initiatives, such as a push in China.
Credit impairment, a source of worry for bank investors in
recent years as the global economy cools and runaway inflation
pressures businesses, remained low at just $26 million versus
$198 million in the same period a year earlier.
The bank said it saw signs of stabilisation in China's
troubled commercial real estate market, with no increase in
credit impairment from the previous quarter.
China's policy direction has turned positive on real estate,
"but the underlying economic activity and sales activity of the
real estate projects is not yet back to where it was", Deputy
Chief Financial Officer Peter Burrill said at an industry
conference last month.
($1 = 0.8906 Swiss francs)
(Reporting by Selena Li and Lawrence White in London; Editing
by Muralikumar Anantharaman, Christopher Cushing and Sharon
Singleton)
