Standard Chartered Reports Profit Spike Amid Uneven Recovery Phase

Standard Chartered (STAN.L) has reported hefty quarterly profits before taxes due to smaller credit impairment charges, but it’s forecasting a flat income for the full year due to fluctuations brought about by the pandemic.

Pre-tax profits for Standard Chartered surged to £730 million for the third quarter of 2021, nearly £320 million more than this time last year. This goes against early predictions from analysts who estimated a profit of £691 million for the bank.

Pandemic Impact

Standard Chartered reported a smaller total of impairment charges of around £79 million this year, which is a significant drop from last year’s total of £259 million. The bank is hopeful that credit impairment will stay at low levels for its fourth quarter.

It is clear that Standard Chartered has been guided through the pandemic tactfully by group CEO Bill Winters and his team, which has resulted in a strong performance this year.

Investors are delighted with the prospects of the bank and what Winters is doing there. Their work has proved to help mend the balance sheet and cut back on costs, but the bank has not been without criticism.

Many investors are calling on Standard Chartered to boost growth, but with their stocks shrinking by 8% on Tuesday morning, it’s apparent that the bank is still feeling the aftershocks of the pandemic.

Evergrande

What’s more, Standard Chartered has felt the brunt of China’s real estate woes and the heavily debt-laden Evergrande Group. Standard Chartered themselves have around £3.1 billion of exposure in the Chinese real estate market.

Competition such as HSBC (HSBA.L) appears to have slightly stronger growth expectations than Standard Chartered too, so the full picture of the bank’s health remains to be seen.

Even with strong levels of growth in the export markets across Asia, the uneven supply chain disruptions and the global pandemic has made for an uneven economic recovery for Standard Chartered.

As it stands, overall quarterly income for Standard Chartered jumped 7% from last year. With a target set at a return of 5 to 7% income growth next year, Standard Chartered appears to be gearing up for a healthy year ahead.