© Stocksak. FILE PHOTO – The Standard Chartered logo can be seen at their London headquarters on July 26, 2022. REUTERS/Peter Nicholls
Lawrence White and Anshuman Daga
SINGAPORE (Stocksak), Standard Chartered reported a 40% rise in quarterly profit due to higher interest rates. This boosted the bank’s income and gave it the ability to increase its revenue outlook.
The bank anticipates that income will grow 13% this year, instead of the previously forecasted 10%.
CEO Bill Winters stated Wednesday that “We remain confident in meeting our 2024 financial goals.”
The bank, based in London, showed how rising interest rates are helping banks make profits, despite the fact that the global economy is struggling with volatile energy costs and the impacts of the Russia/Ukraine war.
According to the bank’s analysis, the lender, which has most of its revenue in Asia said that its statutory pretax profit rose to $1.39billion in the three-month period ending Sept. 30, from $996m a year earlier. This is compared to the $1.05billion average estimate of 14 analysts.
StanChart is present in 59 countries with 85,000 employees. It primarily relies on capturing trade flow between its key markets of Asia and Africa, but it lacks the weight of larger competitors in investment banking and commercial banking.
Winters, who was appointed seven years ago, tried to restore growth and build a portfolio of digital assets. He also repaired the bank’s financial position and cut thousands of jobs during his tenure.
Despite the fact that the company’s share prices have fallen by 45% under his leadership, they have risen 24% this year to surpass peers.
Winters stated, “Our performance in this year was strong, and the pace for economic recovery in many footprint markets is encouraging, despite increasing recessionary pressures within certain Western markets.”
To contain rising inflation, central banks around the globe have tightened monetary policy.
Rising rates have a tradition of buoying bank profits because they can make more from lending that they pay to savers. But the current picture is clouded in the face of an economic downturn, which could lead to substantial losses for lenders.
StanChart’s statutory credits impairment charges more than doubled in the past year to $227 million. This is due to weakness in key economies. Among other things, the charges include $130 million for exposures to China commercial realtys.