Standard Chartered unfazed by trade row

Pretax profit rises to $2.35b in the first half of the year, from $1.75b during the same period last year

Asia-focused lender Standard Chartered Plc said it expects minimal impact on its income from rising US-China trade tensions, as it reported higher pretax profits and lower bad loan losses for the six months ended June.

The bank said it was confident it would continue to deliver better returns in the medium term as its sweeping restructuring measures pay off, while its “limited” exposure to the mounting US-China spat will also aid the bottom line.

“Our direct exposure to increasing tariffs between the US and China is minimal, less than 1 per cent of income,” Standard Chartered CEO Bill Winters said on a conference call with reporters.

“It’s not a disastrous thing for Standard Chartered ... but if the trade war escalates it could be more disruptive for the global economy and our clients,” he said.

Some of StanChart’s customers have slowed crossborder investment decisions because of the escalating trade tensions, Winters said, adding that would continue until there is clarity on the breadth and size of tariffs between the two countries. The bank said its return on equity (ROE), a key measure of profitability, was 6.7 per cent in the first half.

Impairments halved

Its credit impairments, a source of pain in recent years from bad loans in Asia, halved to $293 million (Dh1 billion).

The ROE “reinforces our confidence that we will exceed 8 per cent in the medium term and validates our decision to resume an interim dividend”, said Winters, who implemented the restructuring measures when he joined the bank in 2015.

The lender issued an interim dividend of 6 cents a share.

Pretax profit for the bank rose to $2.35 billion in the first half of the year, from $1.75 billion in the same period last year, the lender said in a regulatory filing yesterday.

The bank saw its retail banking income rise 9 per cent on strong performances in Greater China and North Asia.