StanChart's US$1.91b profit beats forecasts

Standard Chartered (2888) beat forecasts with a 5.5 percent rise in its first-quarter pretax profit, as the income boost from higher interest rates and a robust performance from its markets trading business offset a surge in credit losses.

StanChart posted a pretax profit of US$1.91 billion (HK$14.9 billion) in the January-March quarter, compared with US$1.81 billion a year earlier and the US$1.39 billion average of 13 analyst estimates compiled by the bank.

The London-based bank, which makes the bulk of its revenue and profits in Asia, saw profit at its investment banking unit climb 13 percent in the quarter.

Crucially, the bank grew fee-based revenues as it raked in more wealthy clients and saw robust trading activity across its market product set, a key target for it and rivals such as HSBC

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

The underlying pretax profit of its Hong Kong business jumped 17 percent to US$620 million from a year ago.

But the lender's credit impairments worsened in 2024, with a US$165 million write-down in the first three months, compared to US$20 million a year earlier.

The bulk of the credit impairment was accounted for by the bank's wealth and retail banking division, as the unit was hit by "mortgage headwinds" in Hong Kong and South Korea, StanChart said.

The British bank has made provisions worth US$1.2 billion in total for the Chinese commercial real estate sector, it said. Its total credit exposure to the sector was at US$2.4 billion, down US$200 million from the preceding quarter.

StanChart had taken a total of US$850 million in write-downs in previous quarters on its stake in China's Bohai Bank (9668), which like its peers suffered from a slowing Chinese economy and the deepening crisis in the property sector.

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

Elsewhere, Singapore's biggest bank DBS reported yesterday first-quarter results that trumped expectations with broad-based growth, and expected net profit to exceed last year's record result.