Friday, July 19, 2024
Home > Uncategorized > Standard Chartered posts 46% jump in profit but warns of 2020 coronavirus hit

Standard Chartered posts 46% jump in profit but warns of 2020 coronavirus hit


Standard Chartered posted a substantial rise in pre-tax profit for 2019 on Thursday, but the Asia-focused bank warned that the spread of the coronavirus would likely slow progress toward one of its key earnings targets.

The company said annual pre-tax profit was up 46% at $3.7 billion for the year, although this was slightly below analyst expectations, and said it expects to take longer to meet its 10% ROTE (return on tangible equity) target.

Standard Chartered CEO Bill Winters told CNBC that the bank’s expectations on economic activity and interest rate trajectory this time last year had been “wrong,” and that hopes of a “quick recovery” globally after the coronavirus outbreak now seemed a “little more remote.”

“The economy hasn’t been quite where we’d like it to be and then of course we had the shock, both of the virus and also the unrest in Hong Kong,” he told CNBC’s “Squawk Box Europe.”

Underlying profit at the company was up 8% to $4.2 billion and ROTE climbed 130 basis points to 6.4%.

Bill Winters, chief executive officer of Standard Chartered Bank. 

Qilai Shen | Bloomberg | Getty Images

However, fourth-quarter pre-tax underlying profit fell 25% from the same quarter in 2018, coming in at $325 million, as unrest in Hong Kong and a slowing global economic environment weighed on the British lender.

“It doesn’t take us away from the core plan and it doesn’t take us away from our conviction that this 10% return on tangible equity, which was what we said we would do a year ago, is every bit as achievable as it was. The only question is how long it takes,” Winters said.

He also highlighted that this was the third year in which costs have remained flat, which he said indicated the bank’s ability to manage its capital and grow income in “difficult circumstances.”

In the bank’s outlook, Group CFO Andy Halford warned that lower interest rates, slower global economic growth, a softer Hong Kong economy and the impact of the coronavirus will “likely result in income growth in 2020 below our medium-term 5-7% target range.”

“These headwinds are expected to be transitory, but we now believe it will take longer to achieve our ROTE target of 10% (for 2021) than we previously envisaged,” Halford added.


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *