Date
20 September 2017
Standard Chartered says difficult market conditions have continued into the second quarter. Photo: Bloomberg
Standard Chartered says difficult market conditions have continued into the second quarter. Photo: Bloomberg

StanChart sees market sentiment remaining weak

Weakness in emerging-market currencies and financial-markets business has dragged the income and operating profit of London-based Standard Chartered Plc (02888.HK) in the first quarter, and such conditions have persisted in the second quarter.

The bank said in a regulatory filing on Thursday that group income in the first quarter was, as expected, down by a low single digit percentage from a year earlier, mainly due to declines in currencies, especially India’s rupee and the Indonesian rupiah.

Revenue from the financial-markets business sank 16 percent in the first quarter from a year earlier amid “challenging market-wide conditions”, the bank said. “Margins have stabilized but remain at compressed levels and pressures continue to impact performance in our financial-markets business, particularly in interest rates.”

“The [overall] difficult market conditions that began last year have continued into the first quarter of 2014 and remain through April and into May,” it said.

The bank, which earns about four-fifths of its income from Asia, said growth in some markets has been offset by weaker performances in others, particularly in Korea, where revenue fell US$110 million from a year earlier due to business restructuring.

In late March, the lender said market and trading conditions are more volatile and difficult than a year ago. While the current performance momentum is ahead of the second half of last year, performance in the first half of 2014 will remain challenged both at the income and profit levels.

HSBC Holdings Plc (00005.HK), another Hong Kong-listed British bank that focuses on emerging markets, said on Wednesday that its profit fell 20 percent in the first quarter from a year earlier as gains from asset sales fell and investment-banking revenue slumped.

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Ayishah Ma is a financial reporter on Greater China issues.

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