HONG KONG/LONDON: Standard Chartered on Wednesday said it expects its main markets to lead global economic recovery from the COVID-19 crisis as early as later this year, striking an optimistic note after increased bad loan provisions squashed quarterly profit.
Increased credit impairment and provisions for an expected increase in loan losses pushed pretax profit for January-March down 12 per cent from the same period a year earlier to US$1.22 billion, the London-headquartered bank said in a stock exchange filing. The earnings results were"reassuring in context of a challenging quarter", and loan losses, though much higher than expected, were not a huge surprise in the context of what peers have reported, Citigroup said in a research note.
A plunge in crude oil prices in recent days has raised concern about the impact on asset quality as companies in the sector and commodities traders struggle with lower revenue. StanChart said its oil and gas sector exposure has fallen 18 per cent since the first half of 2015.The bank said it is targeting costs of below US$10 billion for the full year, achieved by reducing staff bonuses, pausing hiring and slashing discretionary spending. In the first quarter, expenses fell 2 per cent.