Standard Chartered’s quarterly profits have reached their highest level for almost a decade due to higher interest rates.
The bank focused on emerging markets said that its pre-tax profit in the three-month period ending March was up by 21% to $1.8 billion. This is higher than the $1.4 billion forecast by City analysts.
The underlying profits of the FTSE 100 bank increased by 23 percent to $1.7 billion. This is its best quarter result since early 2014. Before its performance started to falter, it went into a long slump.
The bank has also raised its forecast for revenue growth this year, from 8 to 10% to 10 percent.
Bill Winters is a winner. He is the Standard Chartered chief executive, and has been since 2015. Winters is under pressure from investors to prove that is working. Winters’ 61-year-old predecessor has seen the bank’s share price plummet by over a third, making it vulnerable to takeover.
In January, it was revealed that First Abu Dhabi , the largest bank in the United Arab Emirates , had been considering an bid. Andy Halford, Standard Chartered’s finance chief, stated that there was “no contact” at all with First Abu Dhabi. According to City takeover regulations, the UAE lender cannot approach the British bank before July.
Standard Chartered, based in London, has operations across Asia and the Middle East. It is also benefiting from the sharp rise in interest rates that central banks have pushed over the last year. The lenders can increase their net interest margins – the difference between rates they charge depositors and rates they lend – as a result. Standard Chartered reported that its margin had jumped from 1.29 to 1.63 percent a year ago.
The reopening China after nearly three years of strict Covid restrictions is also a boost. Halford stated that Hong Kong and mainland China were key markets for its bank.
Standard Chartered posted results that exceeded expectations despite the turmoil in global banking last month. Halford added that “our deposit levels have been stable for the entire quarter”.
Standard Chartered shares increased by 13 1/2p or 2.2 percent to 634p.