Fuelled by rising rates, Standard Chartered navigated through a difficult environment to register an increase in first quarter profits and beat market expectations.
Standard Chartered posted $1.49 billion in statutory pre-tax profits, according to its first quarter results, marking a 6 percent year-on-year increase compared to $1.41 billion in the same period last year.
The Asia-focused London-based lender beat the $1 billion average estimate from 16 analysts as compiled by the bank.
Operating income grew 9 percent to $4.27 billion while operating expenses fell 6 percent to $2.64 billion.
Interest Income
Despite increased global economic uncertainty, Standard Chartered expects income growth this year to slightly exceed the previous guidance of 5-7 percent, due to the effects of rising interest rates.
In the first quarter, it saw an 8 percent increase in adjusted net interest income.
Total credit impairment charges increased $180 million to $200 million, marking an annualized loss rate of 24 basis points – below the bank's medium-term guidance of 30-35 basis points.
Positive Outlook
Compared to its global banking peers, Standard Chartered is relatively more optimistic about the outlook for 2022.
While operating income could be higher than expected due to higher performance-related pay from higher income growth exceptions, the bank said it still anticipates that it will deliver on its goal of a 10 percent return on tangible equity by 2024, if not earlier.
«The start of 2022 has been strong and recent geopolitical events have strengthened the outlook for rates albeit making the outlook for the pace of economic recovery less predictable,» the bank said.
