Standard Chartered shares leap as profits double

 
Emma Haslett
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Profits doubled in the first quarter (Source: Getty)

Shares in Standard Chartered jumped in morning trading as profits almost doubled in its first quarter.

The figures

Statutory pre-tax profits jumped to $990m (£772m) in the three months to the end of March, the lender said today - almost twice the $500m it posted during the same period last year, and up from an $871m loss in the final quarter of 2016.

Operating income rose eight per cent to $3.6bn, while restructuring costs fell 55 per cent to $55m.

The jump in profits was driven by a 58 per cent fall in impairment losses on loans, which dropped to $198m, while other impairment charges fell 57 per cent to $53m.

However, regulatory costs rose 27 per cent to $309m, from $243m last year.

Shares jumped 3.9 per cent to 756.5p in mid-morning trading.

Why it's interesting

Standard Chartered is still suffering from the after-effects of the financial crisis, having been hit by bad loans and a giant fine from US regulators back in 2012.

Under chief executive Bill Winters, though, things have begun to look up, with shares rising 38 per cent over the past year - although last month he became caught up in an executive pay row, when it emerged shareholders were planning to protest targets for his long-term bonus.

Its performance in Bank of England stress tests in November also brought out red flags: it was one of two large lenders which failed on one measure, with StanChart missing the BoE's minimum capital requirement.

However, analysts are beginning to regain confidence in the bank: in January shares jumped after Bank of America Merrill Lynch said the Trump administration could be good news for it and Goldman Sachs increased its price target.

What Standard Chartered said

Winters said:

We are making good progress improving the performance of the group. The significantly increased profit before tax results from particularly low loan impairment and our focus on cost control.

Competition in our markets remains intense but our investments in the business and focus on our clients is making us more competitive and will enable us to deliver sustainable income growth over time.

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