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October 29, 2020

Standard Chartered private banking swings back to profit in Q3 2020

Standard Chartered private banking arm returned to profit, beating market jitters in Q3 2020. However, at a group level, profit slumped 40%, though surpassing estimates, as the lender reduced its loan loss provisions.

Private banking highlights

The unit posted a statutory profit before tax of $16m in the three months to September 2020, compared with a loss of $7m in the same quarter of 2019.

A decline in retail deposits led to an 11% decrease in operating income to $129m from $145m, which was offset by wealth management performance.

Operating expenses at the division dropped 15% to $114m from $134m.

Group performance

The group’s underlying pre-tax profit was $745m in the three-month-period ended September 2020, versus $1.24bn a year ago. Statutory profit before taxation plunged 61% year-on-year to $435m.

Underlying operating income of $3.52bn was 12% lower than the previous year. Underlying operating expenses dropped to $2.48bn from $2.5bn.

Credit impairment stood at $358m in Q3 2020, less than $611m in the previous quarter but up 28% from $280m from Q3 2019.

Income rose 4% in financial markets, with double-digit growth in rates, commodities, credit and capital markets. Wealth management income grew 16% to $568m.

The group results were supported by steady performance at many products and markets as well as cost saving measures despite lower interest rates.

Underlying pre-tax profit at Greater China & North Asia dipped 5% to $578m, while in ASEAN & South Asia it remained almost stable at $243m.

Profit fell at Africa & Middle East as well as Europe & Americas.

Group CEO Bill Winters said: “Our transformation is allowing us to weather the macroeconomic storm in good shape. Our Wealth Management and Financial Markets businesses have good momentum, we are controlling costs to fund innovation, and we believe we are well provided against credit impairment.

“Lower interest rates continue to impact income but we remain well-positioned to meet our financial targets, albeit with some delay.”


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