London: Standard Chartered reaped the benefits of a focus on Asia and a resilient loan book on Tuesday as it weathered the financial crisis to report record first-quarter profits, sending its shares to 2009 highs.
The UK-listed bank, which gets two thirds of its revenue from Asia, said consumer banking income had risen, mortgages had performed well and its key wholesale arm had an “excellent” quarter.
Although its bad debts jumped 74% last year to $1.3 billion as more corporate and retail customers ran into trouble in the second half, the bank said on Tuesday that asset quality in the corporate loan book had remained good.
Its shares were up 11.4% at 1,181 pence by 1135 GMT, after an earlier high at 1,220 pence as analysts said they expected average earnings per share forecasts to be nudged up.
“The Standard (statement) suggests performance ahead of our expectations, in both consumer banking and wholesale banking,” said Raul Sinha, an analyst at Nomura.
Banking stocks were the biggest gainers in Europe on hopes that the results of US government stress tests would reveal only modest shortfalls for the sector.
A clutch of European banks including Credit Suisse, Deutsche Bank and Barclays have reported a strong start to 2009, though UBS - one of those worst hit in the economic crisis - confirmed on Tuesday it had made a first quarter net loss of 2 billion Swiss francs ($1.76 billion).
StanChart unveiled few numbers, but its bullish statement came after a March forecast that 2009 had started well, predicting that the Asian economic downturn would be “shorter and shallower” than in the West.
The bank said wholesale banking income was significantly higher than last year, while its consumer banking arm saw income improve from the last quarter - albeit slightly below average levels in the second half of 2008.
Average costs were down 10% from the run rate in the second half of last year.
Standard Chartered has steered a clearer path through the financial crisis than many rivals and profits rose 19% to a record $4.8 billion last year, as the economies where it is active fared better than elsewhere and it avoided large credit-related losses.
The bank - one of several European peers to seek to improve the quality of its capital - said it would book a $248 million profit in the second quarter from last month’s bond buyback and exchange, adding that it remained well capitalized.
“Overall, while the world clearly remains very uncertain, the group has had a strong start to the year, with a record quarter in terms of both profit and income,” it said.