Standard Chartered's Second-Quarter Profit Plunged 40%
July 30 2020 - 1:18AM
Dow Jones News
By Yifan Wang
Standard Chartered PLC's second-quarter pretax underlying profit
slumped 40% from a year earlier, as credit impairments continued to
surge amid the prolonged coronavirus pandemic.
Underlying profit before tax fell to $733 million, compared with
$1.23 billion a year earlier, the Asia-focused lender said
Thursday.
The decline was primarily due to a surge in credit impairments,
which jumped to $611 million from $176 million. The increase
followed an even-sharper increase in impairments in the first
quarter.
Operating income fell 4.2% to $3.72 billion.
Net interest income plunged 15% to $1.66 billion, mainly dragged
by margin compression. Net interest margin was 1.28%, down 0.39
percentage point from the same period in 2019.
For the second half, Standard Chartered expects income to
decline both sequentially and from the prior year, as some
countries' economic recoveries are unlikely to offset the negative
impact of low interest rates globally.
However, the lender believes credit impairments for the coming
months may come down from the first half-year, if economic
conditions in its markets do not materially deteriorate.
The bank added that it has extended its cost-control initiative
into 2021.
Standard Chartered had earlier canceled this year's interim
dividend and warned that the public health crisis 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
July 30, 2020 01:03 ET (05:03 GMT)
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