Britain’s Standard Chartered (StanChart) reported a 10% YoY rise in net profits to $909mn for the June quarter. Net interest income rose 8% to $1.8bn and other income was up 5% to $2.1bn. The bank reported a $67mn credit impairment charge as compared to a $67mn release during the previous year. Net interest margin (NIM) improved 13bp YoY to 1.35%. Performance in terms of Operating income by segments is as follows:

  • Transaction Banking grew 18% YoY to $835mn
  • Cash Management was up 42% to $492mn on the back of rising interest rates helping margin expansion, balance sheet growth, and a rise in fee income
  • Markets increased by 8% to $1.37bn
  • Credit Markets fell 23% YoY to $374mn on widening credit spreads
  • Lending and Portfolio Management decreased 22% YoY to $136mn
  • Wealth Management fell 18% on customer sentiment turning more risk-averse in volatile market conditions. Within Asia, income was impacted by pandemic-related restrictions in North Asia, resulting in branch closures and lower footfall

The bank has guided for NIM progression in H2 2022 and the outlook for the full-year average is expected to be around 140bps and 160bps for 2023. Credit impairment is expected to normalize the medium-term loan-loss rate of 30-35bps. The lender has announced a share buyback of $500mn, which will reduce the CET1 ratio by ~20bps to 13.9%.

StanChart’s dollar bonds were up with its 6% Perp gaining 0.62 points at 99.38, yielding 6.23%.

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