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(Sharecast News) - Standard Chartered posted an 18% profit increase for the first quarter as lower provisions for bad debts offset falling income.
The emerging markets-focused bank's underlying pretax profit rose to $1.45bn (£1bn) in the three months to the end of March from $1.22bn a year earlier.
Operating income fell 9% to €3.93bn as the bank's net interest margin was squeezed by low interest rates but Standard Chartered predicted income would rise in the second half of 2021 as business momentum builds.
The FTSE 100 lender set aside $20m for credit impairments in the first quarter compared with $956m a year earlier when the pandemic was near its peak. Impairment charges will "reduce significantly" in 2021 with the loan loss-rate within the bank's medium-term guidance of 35-40 basis points, Standard Chartered said.
Bill Winters, the bank's chief executive, said: "Our first quarter performance was strong. Economic recovery advanced in many of our markets leading to improved transaction volumes and profitability. This was particularly the case in our financial markets and in wealth management, which had its best ever quarter. Despite low interest rates, we expect our underlying momentum to lead to income growth in the second half of 2021."
Winters predicted some of Standard Chartered's larger markets, which include mainland China, Hong Kong and Singapore, would drive the world economy out of recession in coming quarters and that vaccines and the US fiscal stimulus had lifted economic prospects but he said the recovery would be volatile and uneven.
Standard Chartered shares rose 3.2% to 509.40p at 08:16 GMT.
11 Jan 2024 14:29
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