- The lender reported a 25% increase in pre-tax profit.
- StanChart’s financial performance was boosted by rising interest rates.
Standard Chartered Bank released its financial results for the first half of the year on Friday, reporting impressive growth in earnings due to the rising interest rates and business growth. The London-headquartered global lender recorded a 25% increase in profit before tax and announced a USD 1 billion share buyback.
Standard Chartered, which mainly focuses on emerging markets, reported USD 3.3 billion in profit before tax for the six months ending June 30, which compares to USD 2.7 billion reported in the corresponding period of last year. The lender’s shares increased 5% in London and 3% in Hong Kong on Friday as the market welcomed the positive results.
StanChart has upgraded its guidance for income growth to 12-14% from 10%. However, it has slightly modified its return on tangible equity to 10%. Standard Chartered noted that the impressive performance was achieved despite inflation pushing up the cost of operation.
Defying Macro-Economic Headwinds
Commenting about the financial performance, Bill Winters, StanChart’s Chief Executive Officer, said: “We are mindful of the external macroeconomic headwinds and recent challenges in the banking sector; however, our balance sheet is robust, and we have the right strategy, business model and ambition to deliver our targets.”
Across the global banking sector, the rising interest rates are boosting bank income, Reuters reported. Although there has been a drop in corporate mergers and fundraising, which has affected the deal-making business for most lenders, there is an uptick in the securities trading business.
Standard Chartered’s income from transaction banking increased 92% to USD 2.8 billion, while the cash management income surged 166%, boosted by a rise in revenue from interest rates. On top of that, the lender’s financial markets business increased by 4% to USD 2.8 billion.
