StanChart First-Half Profits Plunge
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Standard Chartered’s profits plunge 33 percent in the first half as the pandemic forces the British lender to significantly up credit impairments by six-fold.
Pre-tax profits fell to $1.63 billion in the first half compared to $2.41 billion in the first half of last year, according to a statement, exceeding the $1.53 billion analyst estimates compiled by the bank.
The bank will also scrap dividends for time being, as per the request from the U.K.’s Prudential Regulation Authority, adding that it hoped to resume payments «as soon as prudently possible».
Although the bank said it was confident in April that its main markets – Asia, Africa and the Middle East – would lead the recovery as early as later this year, the latest result announcement was accompanied by a reversal with expectations for even lower income in the second half.
Credit impairments also shot up six-fold to $1.58 billion in the first half from $254 million a year ago, the statement added.
Just today, the bank was reportedly looking to shave costs by axing hundreds of jobs it described as redundant roles and not related to any coronavirus-linked impact.
Questions & Answers
Q.What was the main reason for the significant drop in Standard Chartered's first-half profits?
What was the main reason for the significant drop in Standard Chartered's first-half profits?
The bank's profits plunged mainly because the pandemic forced it to significantly increase credit impairments. These rose six-fold compared to the previous year, impacting the overall financial performance.
Q.Did Standard Chartered meet analysts' expectations for its first-half pre-tax profits?
Did Standard Chartered meet analysts' expectations for its first-half pre-tax profits?
Yes, the bank exceeded analyst expectations for its pre-tax profits in the first half. It reported $1.63 billion, which was higher than the $1.53 billion estimated by analysts.
Q.Why has Standard Chartered decided to scrap its dividend payments?
Why has Standard Chartered decided to scrap its dividend payments?
Standard Chartered scrapped dividend payments at the request of the U.K.'s Prudential Regulation Authority. The bank hopes to resume these payments as soon as it is prudently possible.
Q.How have the bank's expectations for income in the second half of the year changed?
How have the bank's expectations for income in the second half of the year changed?
The bank's expectations have reversed; it now anticipates even lower income in the second half of the year. This contrasts with its earlier confidence in April about recovery led by its main markets.
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