People pass by the logo of Standard Chartered at a banking and financial conference in Toronto, Ontario, Canada. Reuters
Standard Chartered’s first-half pre-tax profit rose 19 per cent and beat market expectations, as the emerging markets-focused lender benefitted from rising interest rates and issued an upbeat post-COVID outlook, pushing its shares 3.7 per cent higher.
The strong performance unveiled on Friday showed how some banks with a focus on Asia are shrugging off the impact of a weakening macro environment in the United States and Europe that is emerging as a key risk for others.
“There may be some tougher times ahead from an economic perspective, but our markets are recovering quite nicely from what had been a really horrific pandemic,” Chief Executive Bill Winters told reporters on a conference call.
Statutory pretax profit for StanChart, which earns most of its revenue in Asia, grew to $2.8 billion in the first half from $2.35 billion a year earlier, beating the $2.48 billion average of analysts’ forecasts compiled by the bank.
The London-headquartered bank also improved payouts to shareholders, with an increased interim dividend of $119 million equal to 4 cents per share, and announced a $500 million share buyback.
StanChart’s London-listed shares rose 3.7 per cent in early trade while its Hong Kong shares were up 1 per cent in a weak market.
Jefferies analysts said StanChart’s forecast-beating pretax performance and share buyback programme should be well received.
“Credit performance was materially better,” they said in a note. However, they added, “We do not view second-quarter results as driving consensus earnings estimates higher.”
CEO Winters, who took charge seven years ago has attempted to restore growth while creating a portfolio of digital assets in the last few years, after repairing the bank’s balance sheet and slashing thousands of jobs early in his tenure.