StanC Q1 Profit Down, But Bank on Stronger Wicket

The Economic Times - - Money -

Mum­bai: Stan­dard Char­tered’s global profit be­fore tax shrank to $589 mil­lion in the three months ended March 2016 from $1.44 bil­lion in March 2015 as in­come fell. How­ever, the re­sults were bet­ter than the $4.05 bil­lion loss the bank re­ported in the quar­ter ended De­cem­ber 2015 as pro­vi­sions for bad loans dropped sharply com­pared to De­cem­ber.

In an in­terim man­age­ment state­ment posted on the Bom­bay Stock Ex­change (BSE), the Lon­don based lender said op­er­at­ing in­come fell 24% to $3.34 bil­lion from $4.42 bil­lion in the quar­ter ended March 2015. All four of its busi­ness heads, namely, cor­po­rate bank­ing, com­mer­cial clients, pri­vate bank­ing and re­tail clients re­ported a lower in­come. Stan­dard Char­tered said de­pressed com­mod­ity prices, volatil­ity in China, weak emerg­ing mar­ket sen­ti­ment and con­cerns around in­ter­est rates con­tin­ued to make trad­ing con­di­tions chal­leng­ing in the first quar­ter of 2016. How­ever, group CEO Bill Win­ters said the bank con­tin­ued to make progress on its strate­gic ob­jec­tives.

“We are tak­ing ac­tion to im­prove re­cent in­come trends, man­ag­ing costs tightly, pro­gress­ing on key in­vest­ments, mak­ing early progress on the exit of the liq­ui­da­tion port­fo­lio and main­tain­ing strong lev­els of cap­i­tal and liq­uid­ity,” Win­ters was quoted in the state­ment.

The bank is in the talks with dis­tressed as­set ag­gre­ga­tors to sell about $1.5 bil­lion of loans linked to In­dia.

The in­terim state­ment re­leased on Tues­day showed that to­tal op­er­at­ing ex­penses dropped 10% to $2.24 bil­lion down from $2.50 bil­lion in March 2015 and also lower than the $2.96 bil­lion the bank re­ported in De­cem­ber 2015.

Pro­vi­sions for bad loans dropped $471 mil­lion in March 2016, the low­est in two years down from $476 mil­lion a year ear­lier and sharply lower than the $1.12 bil­lion re­ported in De­cem­ber 2015.

The re­sults were greeted by the mar­kets as the bank’s stocks rose 10% mainly be­cause of lower pro­vi­sions and the fact that the core Tier I cap­i­tal for the bank rose to 13.1% from 12.6% in De­cem­ber.

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