Standard Chartered Q3 profit rises as bad debts drop
By Sean Farrell
Date: Tuesday 02 Nov 2021
(Sharecast News) - Standard Chartered's underlying profit rose 44% in the third quarter as the emerging markets-focused bank's income rose and bad debts fell sharply.
Underlying pretax profit increased to $1.08bn from $745m in the three months to the end of September from a year earlier as operating income rose 7% to $3.77bn. Underlying credit impairments fell 70% to $108m as economies recovered from the worst of the pandemic.
The FTSE 100 bank said it expected annual income to be similar to the year before on a constant currency basis but lower in the fourth quarter than in the third. Statutory pretax profit more than doubled to $996m from $435m.
Income was boosted by a 10% increase in the financial markets business to $1.32bn at constant currency and a 17% rise in trade finance revenue to $300m. Wealth management income fell 3% to $559m, mainly because a bancassurance bonus from 2020 was not repeated.
Underlying operating costs fell 5% to $2.59bn. Standard Chartered stuck to its guidance for annual costs, excluding currency moves and performance-related pay to be $10.4bn at most.
The common equity tier 1 ratio improved to 14.6% at the end of the the quarter from 14.1% three months earlier. The bank said it expected the ratio to be near the top of its 13-14% range for the full year.
Bill Winters, Standard Chartered's chief executive, said: "We delivered a return to top-line growth in the third quarter and achieved further progress against our strategic priorities, with strong performance in our financial markets and trade businesses and ongoing positive momentum in wealth management."
Shares of Standard Chartered, which had made strong gains before the results, fell 7.4% to 468.5p at 10:33 GMT and were the biggest losers in the FTSE 100.
Chris Beauchamp, chief market analyst at IG, said: "Standard Chartered beat expectations in its results this morning, but after a 24% bounce from the October low to yesterday's close, investors are relearning the phrase: 'it is better to travel than to arrive'. Still, there was plenty to like in the numbers, even if the outlook was rather cautious."
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