STAN Standard Chartered Plc

By Yifan Wang

Standard Chartered PLC's first-quarter profit edged up by 4%, thanks to recovering interest income and better cost efficiency, even though the bank sharply raised credit impairment charges to reflect China's property sector risk and the impact of the Russia-Ukraine war.

Standard Chartered's move to dial up credit impairments was in line with its peer HSBC Holdings PLC, which earlier this week also made large provisions in the first quarter for souring loans in Russia and China.

The Asia-focused bank Thursday posted underlying pretax profit of $1.50 billion, compared with $1.45 billion in the same period in 2021.

First-quarter operating income rose 9% to $4.29 billion, extending an upturn since the bank in late 2021 resumed top-line growth for the first time since 2019.

The growth was driven by a rebound in net-interest income, as global central banks began to raise interest rates earlier this year. Net-interest income rose 8% to $1.79 billion. Stanchart's net-interest margin increased by 0.07 percentage point to 1.29%.

Credit impairments during the quarter were $200 million, up from $20 million in the same period a year earlier. The lender raised charges on its exposure to China's commercial real estate sector.

The bank remains "alert to the challenging external environment including the continued impact of Covid-19 in key markets, idiosyncratic pressures in the China commercial real estate sector, commodity price volatility and the impact of the Russia-Ukraine military conflict," it said.

The bank maintained its previous guidance that income will grow in the 5%-7% range in 2022. "We are on track to deliver 10% return on tangible equity by 2024, if not earlier," it said.

Write to Yifan Wang at yifan.wang@wsj.com

(END) Dow Jones Newswires

April 28, 2022 01:08 ET (05:08 GMT)

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