Standard Chartered profit swells a surprise 21% on soaring interest rates

StanChart, which earns most of its revenue in Asia, said statutory pretax profit for January-March reached $1.81 billion.

Chief Executive Bill Winters said he now expects income to grow around 10% this year, at the top end of a previously guided range. (File image)

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Standard Chartered PLC (StanChart) on Wednesday said first-quarter pretax profit jumped 21%, beating analyst estimates, as rising interest rates buoyed cash management income and retail product sales of the emerging markets-focused lender.

StanChart, which earns most of its revenue in Asia, said statutory pretax profit for January-March reached $1.81 billion. That compared with $1.49 billion a year earlier and the $1.43 billion average of 14 analyst estimates compiled by the bank.

Chief Executive Bill Winters said he now expects income to grow around 10% this year, at the top end of a previously guided range.

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It was the bank’s largest single-quarter profit since the start of 2014, as rising interest rates boosted lending income while its financial markets trading division saw frenzied trading from customers amid volatile markets.

The earnings update from StanChart showed how rising central bank rates have boosted revenue, as it charged borrowers more interest while not passing through all of the increase to depositors.

The bank said income in its corporate cash management business tripled thanks to “strong pricing discipline and passthrough rate management”, while retail banking income rose 53%.

Not all of the update was positive for shareholders, with expenses rising 5% due to inflation and hiring for strategic initiatives such as a push in China.

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Credit impairment, a source of worry for bank investors in recent years as the global economy cools and runaway inflation pressures businesses, remained low at just $26 million for the quarter, down from $198 million a year earlier.