StanChart’s profit of $1.91 billion exceeds expectations

Reuters and staff reporter

Standard Chartered (2888) beat expectations with a 5.5 percent rise in pre-tax profit in the first quarter, as revenue growth from higher interest rates and robust market trading performance offset a rise in credit losses.

StanChart posted a pre-tax profit of US$1.91 billion (HK$14.9 billion) in the January-March quarter, up from US$1.81 billion a year earlier and the average of US$1.39 billion on a 13-year basis bank’s analyst estimates.

The London-based bank, which generates most of its revenue and profits in Asia, saw profits at its investment banking unit rise 13 percent in the quarter.

Crucially, the bank grew fee-based revenues as it acquired more high-net-worth customers and saw robust trading activity in its marketplace products, a key target for the bank and for rivals such as HSBC.

The bank maintained its full-year guidance for 2024 and expects to increase the dividend for the full year.

Underlying pre-tax profit from the Hong Kong operations rose 17 percent from a year ago to $620 million.

But the lender’s loan impairments deteriorated in 2024, with a write-down of $165 million in the first three months, compared with $20 million a year earlier.

Most of the credit deterioration came from the bank’s wealth and retail banking division, as it was hit by “mortgage headwinds” in Hong Kong and South Korea, StanChart said.

The British bank has made provisions worth a total of $1.2 billion for China’s commercial real estate sector, the bank said. Total credit exposure to the sector was $2.4 billion, down $200 million from the previous quarter.

StanChart had taken a total of $850 million in writedowns in recent quarters on its stake in China’s Bohai Bank (9668), which, like its peers, was suffering from a slowing Chinese economy and the deepening crisis in the real estate sector.

Shares of StanChart rose 6 percent in Hong Kong after the results.

Elsewhere, Singapore’s largest bank DBS yesterday reported first-quarter results that beat expectations with broad-based growth, and expected net profit to surpass last year’s record result.