Standard Chartered's 1Q Profit Fell as Impairments Surged

   By Yifan Wang

Standard Chartered PLC's first-quarter pretax underlying profit fell despite higher income, as credit impairments rose significantly due to the rapid spread of the coronavirus pandemic.

Pretax underlying profit fell 12% to $1.22 billion, the Asia-focused bank said Wednesday.

The decline was in part due to a sharp increase in credit impairments, which jumped more than ten times from a year earlier to $962 million.

Operating income rose 13% to $4.33 billion, primarily driven by strong performance in the lender's financial markets business.

Net interest income, however, dropped 4.2% to $1.84 billion due to margin compression. Net interest margin fell 0.14 percentage point to 1.52%.

Standard Chartered said it expects large-scale benchmark rate cuts by the U.S. Federal Reserve and other central banks to hurt its income by a further $600 million in 2020.

The bank had earlier canceled its final dividend for 2019 and said it would not consider an interim dividend this year in order to conserve capital during the pandemic.

Standard Chartered also warned that the public health crisis and resulting economic slowdown could derail its previous target to achieve at least 10% return on tangible equity by 2021.

Write to Yifan Wang at yifan.wang@wsj.com

(END) Dow Jones Newswires

April 29, 2020 01:17 ET (05:17 GMT)

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