Standard Chartered registers $190m charge on Iran war
Standard Chartered’s impairment charges jumped in the first quarter as the bank set aside a hefty sum to cover volatility in the Middle East.
The FTSE 100 giant booked $296m in credit impairment charges, with $190m of this coming from “precautionary management overlays” related to the war in Iran.
The Asian-focused bank’s activity in the Middle East makes up around six per cent of its total exposure.
It added there was “no material impact” from the war, but it was taking measures to prepare for any potential sovereign downgrades and volatility in the oil and gas sector.
Still, the bank was able to pick up a $2.5bn (£1.9bn) profit for the first three months of the year, breezing past the $2.1bn analyst estimate.
Wealth a ‘stand-out’ at Standard Chartered
Jefferies analysts Joseph Dickerson said wealth was the “stand-out” performer in Standard Chartered’s first-quarter after revenue in the division swelled 32 per cent year-on-year to $1bn.
The came from a boon in its wealth and global banking divisions with a record $18bn flowing into the wealth management division.
Total income hit $5.9bn, which raced 20 per cent ahead of the previous quarter’s performance.
Standard Chartered’s chief executive Bill Winters, who soon approaches 11 years at the helm, said: “Despite ongoing geopolitical tensions and global economic uncertainty, our advantaged market presence and disciplined risk management give us confidence in our ability to perform.”
The bank is expected to unveil a fresh set of medium-term financial targets at an event next week.
“Loan demand is starting to pick up and deposit volumes continue to surprise, driving better net interest income,” Dickerson added.
Net interest income nudged up one per cent in the quarter to $2.9bn.
The bank is expecting operating income growth to come in at the bottom end of the 5 to 7 per cent range, with net interest income broadly flat year-on-year.
Meanwhile, return on tangible equity – a financial metric that measures a company’s profitability – is set to be greater than 12 per cent.