HONG KONG (REUTERS) - Standard Chartered posted a better-than-expected 20 per cent rise in pretax profit for the first three months of the year, helped by a surge in loan demand and improvement in asset quality.
The first-quarter profit jump on Wednesday (May 2) builds on early signs of success, including a return to dividend payments, for StanChart, which, under the leadership of chief executive Bill Winters since 2015, has undergone a sweeping restructuring.
Pretax profit for the bank, which focuses on Asia, Africa and the Middle East, rose to US$1.26 billion in the quarter ended March 31 from US$1.05 billion in the same period a year ago, it said in a statement to the stock exchange.
That was above an average estimate of US$1.21 billion drawn from nine analysts in a poll collated by the bank.
The bank's operating income in the quarter rose 7 per cent to US$3.9 billion.
Net impairment on financial assets in the quarter was at a similar level to the same period last year and 29 per cent lower than in the fourth quarter, the bank said.
StanChart in February unveiled a new medium-term goal of an 8 per cent return on equity, as it recovers from a restructuring that saw the key profitability metric fall into the negative. It has not announced the timetable for achieving the goal.
It posted an annualised return on equity of 7.6 per cent in the March quarter, compared to 6.3 per cent in the first quarter of 2017.
"This encouraging start to the year shows that we are firmly on the path laid out in February that will take us above an 8 per cent return on equity in the medium term," Winters said in the statement.
Losses from bad debts had plagued StanChart in the recent past, but the bank has since tightened limits on who can make decisions about such big loans and decreased internal limits for exposure to a single client.
Hong Kong shares of StanChart were trading up 0.8 per cent after the results, while the broader Hong Kong market was down 0.6 per cent.