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Shares in Standard Chartered jumped more than 10% today after the Asia-focused bank said it delivered record levels of revenue and profit in the first quarter despite challenging economic conditions.
Chief executive Peter Sands said at the time of the bank's full-year results in March that he believed the economic downturn in Asia would be “shorter and shallower” than the recessions in Europe and the US.
Standard Chartered today said its consumer banking business had seen a marginal improvement in revenues during the first quarter over the final quarter of 2008.
Unlike many UK and US banks, one of Standard Chartered's strongest areas in the first quarter was mortgages, with increasing margins in Hong Kong, Singapore, Taiwan and India.
A weak spot remains wealth management, where “income remains muted”, and the bank said it remained cautious about the near-term outlook. It added: “We continue to see stresses in certain markets and investor confidence remains weak.”
Wholesale banking had “an excellent start to the year” with particularly strong performances in foreign exchange trading and interest rate products. There was also strong growth in corporate finance work.
The bank said that while the world outlook remained uncertain, it would “remain vigilant and continue to take a highly proactive approach to managing our balance sheet”. It described it capital and liquidity position as “excellent”.
Alex Potter, banking analyst at Collins Stewart, said that the statement suggested revenues were running better than most people had expected while cost savings at about $200 million (£132 million) were higher than expected. He said this suggested there would be further good news when HSBC, Standard's major UK rival in Asia, updates the market next Monday.
Meanwhile, he feels that Standard Chartered is a “long-term winner” but that its share price has run ahead of events. He advises clients to take profits.
