Last checked at 
(Alliance News) - Standard Chartered PLC on Thursday reported a "strong" start to 2021, with a sharp drop in credit impairments and a record quarter from its Wealth Management arm giving the bank confidence for the rest of 2021.
In the three months to March 31, the Asia-focused lender reported a sharp jump in pretax profit to USD1.41 billion from USD886 million the year before.
This followed a dramatic drop in the lender's credit impairment to USD17 million from USD962 million.
Operating income fell 9% in the first quarter to USD3.94 billion from USD4.34 billion the year before, with net interest income down 10% to USD1.66 billion from USD1.84 billion.
StanChart's adjusted net interest margin worsened to 1.22% from 1.52% the year before.
Chief Executive Bill Winters 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."
Operating expenses grew to USD2.53 billion from USD2.37 billion, which resulted in the lender's cost-to-income ratio worsening to 64.2% from 54.6%.
StanChart ended the quarter with a CET1 ratio of 14.0% compared to 13.4% at the same point the year before.
The bank's loan book ended the quarter at USD292.08 billion, up 8% year on year from USD271.23 billion.
Customer deposits rose 5% to USD441.68 billion from USD422.19 billion.
Looking ahead, StanChart believes its larger markets will "continue to drive the global economy". On top of its "stabilising" net interest margin - which broadly flat from the final quarter of 2020 - the bank is "confident" in reinforcing its 2021 guidance.
"Our areas of strategic focus including efforts to lead with a differentiated sustainability offering are growing well. Despite low interest rates, we expect underlying momentum to lead to income growth in the second half of 2021," Winters added.
StanChart still expects its expenses to grow slightly in 2021, on the back of increased investment in its digital banking.
"We now expect impairment charges to reduce significantly year on year in 2021 with the loan loss rate likely to be in or below our 35 to 40 basis point medium-term guidance range."
By Paul McGowan; paulmcgowan@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
