Standard Chartered reported a 10% rise in its first-quarter profit, driven by strong performances in wealth, markets, and other fee-based businesses, which helped offset narrowing rate income. The bank posted a pretax profit of $2.1 billion, up from $1.91 billion in the same period last year, exceeding analysts’ forecasts of $1.905 billion. Despite these positive results, CEO Bill Winters highlighted concerns over global economic and geopolitical complexities, particularly due to the imposition of trade tariffs, which have increased uncertainty and could affect credit quality. The bank’s credit impairment charges rose by 24% to $219 million, signaling potential impacts from rising trade tensions.
Standard Chartered noted a $23 million increase in credit charges, reflecting a higher probability of risk from ongoing global trade tensions, which include concerns over tariffs and their broader economic implications. This sentiment echoed similar concerns voiced by HSBC earlier this week, which reported a significant decline in profit but also raised warnings about the effect of trade tensions on credit quality and loan demand.
The bank’s shares on the Hong Kong stock exchange rose by as much as 3.3%, reaching a five-week high, surpassing the performance of the Hang Seng Index. However, analysts pointed to significant concerns in the Hong Kong market, where credit costs have increased substantially, now accounting for over 40% of the bank’s total credit costs, despite the loans from Hong Kong comprising just 25% of the bank’s total loan portfolio.
Standard Chartered’s net interest income declined by 5% in the first quarter compared to the previous quarter, reflecting a challenging interest rate environment and the broader economic landscape. However, the bank saw strong growth in its non-interest businesses, particularly in its Wealth Solutions division, which experienced a 28% rise in income. The Global Banking and Global Markets units also saw impressive gains, with increases of 17% and 14%, respectively.
Despite the positive performance in non-interest income, the bank did not announce any new share buybacks or dividend payouts, signaling a cautious outlook amid the ongoing global economic uncertainties.
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