By Selena Li and Scott Murdoch
HONG KONG (Reuters) -Standard Chartered on Friday reported a 10% profit rise as strong wealth, markets and other fee-based business boosted revenue against narrowing rate income, though it joined peer HSBC in saying increased tariffs would weigh on credit quality.
The Asia-, Africa- and Middle East-focused bank reported pretax profit for the first quarter of $2.1 billion, versus $1.91 billion in the same period a year earlier and the $1.905 billion average of analyst forecasts compiled by the bank.
“The subsequent imposition of trade tariffs has increased global economic and geopolitical complexity, and we remain watchful of the external environment,” CEO Bill Winters said in an earnings release.
The lender reported credit impairment of $219 million in the quarter, up 24% from a year earlier, with signs of rising trade tension impacting credit quality.
A $23 million rise in credit charge reflected “an increased probability weighting for the Global Trade and Geopolitical Trade Tensions scenario, given the heightened uncertainty around trade tariffs,” the bank said in the release.
The price of StanChart’s Hong Kong-listed shares rose as much as 3.3% to a five-week high after the earnings release, outpacing a 1.7% rise in the benchmark Hang Seng Index.
The lender’s tariff comment mirrored that of HSBC which earlier this week reported a 25% first-quarter profit fall – albeit beating estimates – and forecast worsening loan demand and credit quality in the wake of rising trade tension.
StanChart’s net interest income in the first three months of this year fell 5% from the previous quarter on a constant currency basis.
The bank flagged a challenging outlook for the closely watched performance measure in view of the current interest rate environment and economic landscape.
The London-based lender’s non-interest rate business booked robust performance, reporting 28% first-quarter income growth in its Wealth Solutions division, and increases of 17% and 14% in its Global Banking and Global Markets units respectively.
StanChart did not announce a new share buyback or dividend payout on Friday.
(Reporting by Selena Li, Scott Murdoch and Sinead Cruise; Editing by Christopher Cushing)
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