Profits Decline at Standard Chartered
LONDON -- The shares of Standard Chartered slumped 5% to 1,616 pence during early London trade this morning after the bank revealed lower first-quarter operating profits.
Standard Chartered, which earns 84% of its profits in Asia, delivered a slight improvement in first-quarter revenue. However, increased charges for bad loans and higher staffing costs caused the bank's margins to suffer.
The company said it enjoyed a "very strong start" to 2013 driven by growing client volumes, but reported slower momentum as the quarter progressed.
Standard Chartered revealed "double digit" revenue growth in its Hong Kong and African divisions, but claimed this was offset by weaker performance in Korea and Singapore.
Standard Chartered chief executive Peter Sands commented:
Standard Chartered has continued to deliver a resilient performance despite the impact of extraordinary monetary policies in the West and Japan on liquidity conditions across Asia and thus on margins.
We remain focused on continuing to grow the business, building on our long-standing relationships with our clients and customers, on maintaining our strong balance sheet, and on keeping a firm grip on costs and risks. We are in the right markets and remain confident in the outlook for our business.
With a market cap of 39 billion pounds, Standard Chartered's shares trade at 11 times expected earnings, and offer a prospective dividend yield of 3.8%.
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