Standard Chartered profits rise 40% on back of global interest rate increases
Standard Chartered’s third-quarter profits came in higher than expected due to rising interest rates, with Singapore’s contribution to the bank’s bottom line surpassing that of Hong Kong, which has struggled to recover from pandemic restrictions.
The bank reported pre-tax profit of $1.4bn in the third quarter, up 40 per cent from a year earlier on a constant currency basis and beating analyst estimates of $1.1bn, as interest rate rises in the lender’s main markets drove net interest income to more than $2bn.
The outperformance from StanChart follows rival lender HSBC posting bumper third-quarter profits on Tuesday and comes despite tumult in its home market, where traders have been rattled by recent tumult in UK government bonds.
StanChart was also forced to take total credit impairment charges of $227mn, overshooting estimates by about $20mn and up about $120mn from a year earlier.
About $130mn in impairments came from the bank’s exposure to mainland China’s real estate market, where a liquidity crisis has driven several of the country’s biggest developers to default on debt repayment obligations. The bank also took a $96mn charge related to sovereign ratings downgrades for Ghana and Pakistan.
Separately, lower profit at China Bohai Bank resulted in profit from StanChart’s associates and joint ventures falling $30mn in the third quarter to just $16mn.
This story originally appeared on: Financial Times - Author:Hudson Lockett
