STAN.L - Standard Chartered PLC

LSE - LSE Delayed Price. Currency in GBp
368.40
-23.70 (-6.04%)
At close: 4:37PM BST
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Performance Outlook
  • Short Term
    2W - 6W
  • Mid Term
    6W - 9M
  • Long Term
    9M+
Previous Close392.10
Open383.40
Bid365.00 x 0
Ask425.00 x 0
Day's Range368.40 - 390.20
52 Week Range368.40 - 742.60
Volume17,283,547
Avg. Volume11,232,526
Market Cap11.627B
Beta (5Y Monthly)1.41
PE Ratio (TTM)7.69
EPS (TTM)47.90
Earnings DateJul 29, 2019 - Aug 02, 2019
Forward Dividend & YieldN/A (N/A)
Ex-Dividend DateMar 05, 2020
1y Target Est8.78
Fair Value is the appropriate price for the shares of a company, based on its earnings and growth rate also interpreted as when P/E Ratio = Growth Rate. Estimated return represents the projected annual return you might expect after purchasing shares in the company and holding them over the default time horizon of 5 years, based on the EPS growth rate that we have projected.
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    • Reuters

      U.S. judge orders 15 banks to face big investors' currency rigging lawsuit

      A U.S. judge on Thursday said institutional investors, including BlackRock Inc and Allianz SE's Pacific Investment Management Co, can pursue much of their lawsuit accusing 15 major banks of rigging prices in the $6.6 trillion-a-day foreign exchange market. U.S. District Judge Lorna Schofield in Manhattan said the nearly 1,300 plaintiffs, including many mutual funds and exchange-traded funds, plausibly alleged that the banks conspired to rig currency benchmarks from 2003 to 2013 and profit at their expense. "This is an injury of the type the antitrust laws were intended to prevent," Schofield wrote in a 40-page decision.

    • Oilprice.com

      Have Oil Traders Abandoned Fundamentals?

      Oil prices are back at levels last seen in mid-March, and while fundamentals for crude have improved somewhat, markets have become too optimistic

    • Moody's

      Trade Finance Trans. 2018-1 (SCB unfund.CDS) -- Moody's withdraws the ratings of Trade Finance Transaction 2018-1 (Standard Chartered Bank unfunded CDS)

      Moody's Investors Service withdraws the provisional ratings of Trade Finance Transaction 2018-1 (Standard Chartered Bank unfunded CDS) for business reasons. Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

    • China’s Economy Is Inching Out of Virus Slump, Early Data Show
      Bloomberg

      China’s Economy Is Inching Out of Virus Slump, Early Data Show

      (Bloomberg) -- China’s economy continued its slow recovery from the coronavirus slump in May, with better sentiment among companies tempered by the grim global outlook.That’s the assessment from the earliest available indicators, which continued the pickup seen in April. However, global demand is weak and financial markets fell last week partly on disappointment at the government’s modest stimulus plans.China’s Industrial Economy Improves While Consumers Remain WarySmaller firms were more confident in May than they have been since the outbreak of the coronavirus, with production and new orders up, according to a Standard Chartered Plc survey of companies. Industrial output expanded in April, while consumption and imports continued to shrink. How those factors play out will be key, as the world’s largest trading nation continues to rely heavily on exports for growth.“Production continued to lead the recovery, and domestic demand gained momentum,” according to Standard Chartered Economists Shen Lan and Ding Shuang. “As capacity utilization continues to rise, we think the strength of the recovery in domestic demand will determine if production acceleration can be sustained,” but overseas demand is still sluggish, weighing on any desire to expand, they wrote in a report.South Korean exports in the first 20 days of May shrank more than 20% for a second month in a row, with shipments to China down 1.7% compared to the same period a year ago. South Korea releases trade figures earlier than most countries, so its data serves as a bellwether of world commerce.While Chinese exports unexpectedly rose in April, that was likely due to manufacturers catching up on orders from before the pandemic, according to Bloomberg Economics’ David Qu.“China’s trade is likely to remain soft, though some marginal improvement may emerge in the months ahead,” he wrote earlier this month. “Even so, a quick rebound to pre-pandemic levels is unlikely.”New export orders to smaller firms are still contracting, albeit at a slower pace, according to the Standard Chartered survey. The index improved to 47.4 from 41 in April, with a number under 50 indicating a contraction.Sales managers were more confident than in April, although the overall index was still in contraction territory.Market DisappointmentStock and commodity markets have weakened over the last month, as both were underwhelmed with the economic targets and stimulus measures announced last Friday, as well as the ratcheting up of geopolitical tensions between the U.S. and China.While the coming splurge on infrastructure offers a material boost to demand for copper and steel, it may not be enough to offset weaker conditions in other key sectors like manufacturing, property and exports.Note on Early Indicator constructionBloomberg Economics generates the overall activity reading by aggregating the three-month weighted average of the monthly changes of eight indicators, which are based on business surveys or market prices.Major onshore stocks - CSI 300 index of A-share stocks listed in Shanghai or ShenzhenKey property stocks - All the constituents of CSI 300 Index that are in the real estate industryIron ore prices - Spot price of iron ore for shipment to Qingdao port (dollar/metric tonne)Copper prices - Spot price for refined copper in Shanghai market (yuan/metric tonne)South Korean exports - South Korean exports in the first 20 days of each monthFactory inflation tracker - Bloomberg Economics created tracker for Chinese producer pricesSmall and medium-sized business confidence - Survey of companies conducted by Standard Chartered BankSales manager sentiment - Survey of sales managers in Chinese companies by World Economics Ltd.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

    • U.K. Banks Exposed to Hong Kong Fall Amid Political Turmoil
      Bloomberg

      U.K. Banks Exposed to Hong Kong Fall Amid Political Turmoil

      (Bloomberg) -- U.K.-listed banks with heavy exposure to Hong Kong slipped as China’s attempt to tighten its grip on the city fueled a political backlash.HSBC Holdings Plc dropped as much as 6.5%, the most in about seven weeks, while rival lender Standard Chartered Plc declined 4.7%. Insurer Prudential Plc tumbled 9.8%, its biggest fall in more than two months, before paring losses along with the banks.China confirmed on Friday that it would effectively bypass the city’s legislature to implement national security laws. The announcement triggered immediate calls for fresh protests and sent the MSCI Hong Kong index to its worst loss since 2008.“China’s latest move is damaging to gross domestic product, sentiment, loan growth and Hong Kong’s status as a global financial destination,” Bloomberg Intelligence analyst Jonathan Tyce said in written comments. HSBC and Standard Chartered each derive a quarter of their revenue from Hong Kong, and “far more” of their pretax profits, he added.Banks operating in Hong Kong, as well as luxury-goods makers, have been volatile since the final quarter of 2019 as protests gripped the city, sending it into recession. The global spread of Covid-19 spurred share plunges in 2020.Prudential, which has seen its shares plunge 28% year-to-date, is also highly exposed to the former British colony. Hong Kong accounted for 23% of the London-based company’s adjusted operating profit in Asia in 2019, more than any other market in the continent, according to the group’s annual report.And it wasn’t just European financials dropping on the Hong Kong developments, as luxury-goods makers that are dependent on sales in the city also slipped. Cartier watch-maker Compagnie Financiere Richemont SA and Gucci-owner Kering SA fell as much as 4.1% and 2.3% in Zurich and Paris, respectively.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

    • Reuters

      MORNING BID-A turn for the worse

      Escalating rhetoric from President Donald Trump hit Wall Street yesterday, but Asian markets today are red all over following China's proposal for a new Hong Kong law to ban sedition, secession and treason. The Hang Seng index plunged 5% at one point and the Hong Kong dollar slid the most in six weeks. World stocks are down around 0.7%, but that may pick up steam as a pan-European index is down 1.5% and Wall Street is expected to open weaker.

    • Reuters

      British finance workers prepare for return to office of the future

      Limits on elevators, thermal imaging and temperature checks will greet a first wave of traders and bankers in Britain preparing to return to offices under new norms to tackle the coronavirus. Britain's financial sector is working to bring staff back to city-centre workplaces, which were hastily evacuated as the government imposed a lockdown, leaving the normally humming Canary Wharf and City of London financial districts deserted. Most financial firms have kept small teams in offices through the pandemic, and are now preparing for up to 10% of their staff to return over the next few months, pending government approval, sources familiar with the plans said.

    • U.K. investors have lost out on more than £30 billion in dividends. It is about to get worse, say analysts.
      MarketWatch

      U.K. investors have lost out on more than £30 billion in dividends. It is about to get worse, say analysts.

      More than £30 billion in company dividend cuts has left a huge hole in the pockets of U.K. investors in retirement and those who rely on it to top up their monthly income.

    • Abu Dhabi Offers More Bonds to Stockpile Cash
      Bloomberg

      Abu Dhabi Offers More Bonds to Stockpile Cash

      (Bloomberg) -- Abu Dhabi raised more money from international debt markets just weeks after a $7 billion bond sale as it takes advantage of a drop in borrowing costs to bolster its finances.The emirate sold an additional $3 billion of its three-tranche deal priced in April, according to people familiar with the matter who asked not to be identified because the matter is private. The yields on those bonds, which garnered about $45 billion in orders last month, declined on Monday to all-time lows as optimism that the worst of the oil crisis triggered by the coronavirus pandemic is over offered relief for energy-related borrowers.“For Abu Dhabi, pricing was never an issue, they are a solid credit with good sponsorship,” said Angad Rajpal, the head of fixed income at Emirates NBD Asset Management in Dubai. “It is a smart call to tap and further shore up their buffers than to draw down on the reserves.”Pricing results:135 basis points over U.S. Treasuries of similar maturity for $1 billion of debt due April 2025A spread of 150 basis points for $1 billion of bonds due April 2030For the 30-year bond tap, 3.25%Abu Dhabi, the wealthiest of the seven emirates that make up the United Arab Emirates, is rated AA by S&P Global Ratings. The cost of insuring Abu Dhabi’s debt against default for five years has fallen to about 100 basis points, from a more than 10-year high of 162 basis points in March, when crude prices collapsed.The slump in oil has put a strain on the finances of Middle Eastern energy producers, prompting Saudi Arabia, Qatar, members of the UAE and Bahrain to sell about $31 billion of bonds this year. Abu Dhabi’s Mubadala Investment Co. raised $4 billion last week.Brent crude has lost almost half its value this year, even after recovering to around $35 a barrel from an 18-year low reached last month.The need for large stimulus around the world has prompted other countries to issue more debt as well. Indonesia, Spain and Italy are among nations that have recently offered notes, as massive central bank stimulus helps global credit markets rebound from a March rout.The gradual easing of lockdowns in some economies around the world, together with additional stimulus from governments and central banks, is also buoying investor sentiment, even as many uncertainties remain about the virus and global economy.BNP Paribas SA, First Abu Dhabi Bank PJSC, JPMorgan Chase & Co. and Standard Chartered Plc are the joint lead managers for the Abu Dhabi sale.(Updates with pricing throughout.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

    • Thomson Reuters StreetEvents

      Edited Transcript of STAN.L earnings conference call or presentation 29-Apr-20 6:30am GMT

      Q1 2020 Standard Chartered PLC Earnings Call

    • Emirates NBD has $23.7 million exposure to fallen agri-trader Phoenix
      Reuters

      Emirates NBD has $23.7 million exposure to fallen agri-trader Phoenix

      Emirates NBD has $23.66 million to the Dubai subsidiary of Phoenix Commodities which had recently filed for liquidation, Dubai's biggest lender said on Tuesday. Emirates NBD bank said in a statement that the exposure was to Phoenix Global DMCC, a unit of Phoenix Commodities Pvt Ltd. Phoenix, with offices in Dubai and Singapore, is being liquidated after amassing more than $400 million in potential trading losses, according a document prepared by the liquidators seen by Reuters.

    • U.K. Banks Could Face $99 Billion Pandemic Losses, BOE Says
      Bloomberg

      U.K. Banks Could Face $99 Billion Pandemic Losses, BOE Says

      (Bloomberg) -- The U.K.’s banking industry has the financial strength to withstand the coronavirus pandemic, even though the central bank projects credit losses of about 80 billion pounds ($99 billion) in its latest stress test.The Bank of England said lenders could suffer impairments worth 3.5% of their loans to households and businesses by the end of 2021, if the economy deteriorates sharply. However, it emphasized that Britain’s banking system “is in a stronger position due to the regulatory reforms implemented after the 2008 financial crisis,” with enough capital to absorb losses and extra state support introduced during the pandemic to help borrowers and the economy.The BOE and regulators around the world have raced to help banks withstand the financial strains of the virus outbreak by reducing capital requirements, delaying new rules and making it easier for employees to work from home while complying with rules.Under the BOE’s stress test model published Thursday, corporate defaults could account for 19 billion pounds of losses despite a swath of government support programs, while consumer credit losses could spike and a 4 billion-pound hit from mortgage losses would be tempered by the payment holidays introduced in March.Trading desks could face 7 billion pounds of losses under this stress scenario, although the BOE noted that banks’ trading books are much smaller now than they were in the 2008 crisis.British lenders have already begun to brace themselves for the pandemic’s effects, last week setting aside billions of pounds to cover soured loans as the lockdown sends the U.K. economy into steep recession. They also warned of tough times ahead as the pandemic and its aftershocks cripple corporate clients in entire industries.The test included Barclays Plc, HSBC Holdings Plc, Lloyds Banking Group Plc, Nationwide, Royal Bank of Scotland Group Plc, Santander UK and Standard Chartered Plc.The central bank offered further relief on Thursday, announcing that it was cutting the capital requirement known as Pillar 2A to a “nominal amount” as volatility was making estimates difficult.(Adds detail on test and background from third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

    • Philippines GDP Falls for First Time Since 1998 on Shutdowns
      Bloomberg

      Philippines GDP Falls for First Time Since 1998 on Shutdowns

      (Bloomberg) -- The Philippine economy contracted in the first three months of 2020 as restrictions to stem the coronavirus outbreak shut most businesses and sapped consumption, a trend seen worsening in the current quarter.Gross domestic product fell 0.2% in the first quarter compared to a year ago, using 2018 as the new base year, the Philippine Statistics Authority said Thursday. That was worse than the median estimate of a 2.9% growth in a Bloomberg survey of economists and was the first contraction since the fourth quarter of 1998, according to the agency.GDP slumped by 5.1% in the three months ended March 31 compared to the previous quarter, deeper than the 2% contraction expected by economists. That’s the worst quarter-on-quarter performance on record, according to data compiled by Bloomberg.“Saving hundreds and thousands of lives has come at a great cost to the Philippine economy,” Acting Planning Secretary Karl Kendrick Chua said at a virtual briefing. The second quarter will be worse because of the lockdown since mid-March that covers the capital and much of the Luzon island that accounts for more than half of domestic output.Last quarter’s print surprised many analysts including Standard Chartered Plc’s Chidu Narayanan and Natixis Asia Ltd’s Trinh Nguyen who both see more policy rate cuts on the horizon.What Bloomberg’s Economist Says:“The surprise contraction in Philippine first quarter GDP underscores the severity of the coronavirus pandemic, and highlights that a deeper slump is yet to come. With the lockdown on Luzon effectively shutting down the country’s main economic engine from mid-March, that is paving the way for a much steeper plunge in 2Q.”Justin Jimenez, Bloomberg EconomicsThe Philippine Stock Exchange Index slid as much as 0.7% while the peso fell as much as 0.2% before trading little changed at 12:02 p.m. in Manila.President Rodrigo Duterte plans to gradually reopen the economy after May 15, possibly allowing construction, manufacturing and other essential services to restart, his spokesman said on April 28. With improved testing capacity and as curbs are lifted in some areas, the economy may see a “good recovery” in the second half, Chua said.Rescue PlanThe Philippines is drafting an economic recovery plan, Chua said, to support hard-hit industries. To raise funds, the government sold a $2.35 billion dollar bond and is negotiating as much as $7 billion from multilateral lenders.The government will “need to beef up the stimulus rescue plan,” said Nicholas Mapa, a Manila-based economist at ING Groep NV. “Monetary policy has done much of the heavy lifting and we look for the government to super size the current recovery bill given that 1Q is but a preview of the steep drop we’ll see in 2Q and 3Q.”Bangko Sentral ng Pilipinas has cut the benchmark rate by 1.25 percentage points and banks’ reserve requirement ratio by 2 percentage points this year. It has also provided the government a $6 billion lifeline, purchased its bonds in the market and had eased regulations to support banks and borrowers.(Updates with comments from economic chief, analysts)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

    • StanChart highlights climate goals amid criticism over carbon financing
      Reuters

      StanChart highlights climate goals amid criticism over carbon financing

      Standard Chartered defended its environmental credentials after renewed criticism from climate campaigners for its funding of fossil fuel companies as the bank held its annual shareholder meeting on Wednesday. Chairman Jose Vinals delivered his message to investors via a video posted on the bank's website because the coronavirus lockdown restrictions in Britain means that shareholder gatherings are not allowed. The Spanish economist, who has served as chairman of the bank since December 2016, said StanChart had "long recognised" the threat of climate change and would continue to "respond robustly", pointing to goals to help clients transition to having less than 10% of revenues derived from coal by 2030.

    • StanChart chairman predicts economic recovery led by Asia in late 2020
      Reuters

      StanChart chairman predicts economic recovery led by Asia in late 2020

      Standard Chartered Chairman Jose Vinals said on Wednesday his Asia-focused bank was well placed to benefit from a late 2020 economic rally, despite the "extraordinary" impact of the COVID-19 pandemic on the global economy. The bank's annual investor meeting was closed to shareholders in line with government restrictions to control the spread of the new coronavirus.

    • Such Is Life: How Standard Chartered (LON:STAN) Shareholders Saw Their Shares Drop 63%
      Simply Wall St.

      Such Is Life: How Standard Chartered (LON:STAN) Shareholders Saw Their Shares Drop 63%

      Generally speaking long term investing is the way to go. But that doesn't mean long term investors can avoid big...

    • Reuters

      GLOBAL MARKETS-Shares edge up as economies look to reopen

      MSCI's world equity index, which tracks shares in 49 countries, ticked up 0.1%, with European shares flat by late morning in choppy trading. New Zealand this week allowed some businesses to reopen.

    • South China Morning Post

      Standard Chartered increases bad loan reserves to nearly US$1 billion, beats analysts' estimates

      Standard Chartered said on Wednesday it increased its reserves for bad loans by nearly US$1 billion in the first quarter, the latest big lender in the city to dramatically increase its provisions as the coronavirus pandemic strangles economies from Hong Kong to New York.On Tuesday, HSBC, one of the city's three currency-issuing banks alongside Standard Chartered and Bank of China (Hong Kong), said it increased its reserves for bad loans and credit impairments to its highest level in nine years and warned its provisions may surge to as much as US$11 billion for the full year.Standard Chartered, which is based in London, but generates much of its revenue in Asia, reported credit impairments of US$956 million in the first quarter, compared with US$78 million a year ago."We expect a gradual recovery from the Covid-19 pandemic, with major contraction in economic growth rates across most of the world in the second quarter, before the global economy moves out of recession in the latter part of 2020, most likely led and driven by markets in our footprint," the bank said in a stock exchange filing.The emerging markets focused lender said it is "well prepared" for an extended period of "severe dislocation" globally, but was seeing encouraging signs in northern Asia, particularly in China.Standard Chartered reported an underlying pre-tax profit of US$1.2 billion in the first quarter, ahead of a consensus estimate of US$828 million by nine analysts compiled by the bank.On a net basis, profit declined 37 per cent to US$517 million in the first three months of the year, compared with US$818 million in the first quarter of 2019. This year's quarterly results included US$249 million goodwill impairment in India due to a lower gross domestic product growth outlook.Shares of Standard Chartered rose 6.4 per cent to close at HK$39.70 on Wednesday, outpacing gains on Asian indicies as investors reacted positively to the earnings surprise and the bank's upbeat outlook.Morgan Stanley analyst Nick Lord said in a research note that the bank's solid underlying performance in the quarter was "helped by good revenue growth and cost control".The coronavirus, which causes the disease Covid-19, has infected more than 3 million people since late last year and weighed heavily on economies around the world. Organisations from the Swiss bank Credit Suisse to the International Monetary Fund predicted the economic downturn could be the worst since the Great Depression.The worsening economic outlook prompted banks from HSBC to JPMorgan Chase to add tens of billions of dollars in reserves for bad loans and impaired assets. America's six biggest lenders set aside US$25 billion collectively in the first quarter, while big European banks, including Barclays, Credit Suisse and Banco Santander, also took hefty provisions in the quarter.Like its European rivals, Standard Chartered adopted new accounting standards in 2018 that require the bank to recognise potential credit losses over the life of a loan and more aggressively write down loans if they have experienced a significant increase in credit risk.Two clients, which Standard Chartered did not name, accounted for about half of US$480 million in so-called stage three impairments taken during the quarter. Stage three is when an asset is considered credit impaired under the new rules.The economic stress hit Standard Chartered's biggest market, Hong Kong, particularly hard in the first quarter, where the economy was already weakened by an 18-month trade war between the United States and China and months of street protests.The city's jobless rate rose to 4.2 per cent in March " its highest rate since November 2010 " and the economy is expected to contract further after falling into a technical recession last year.Underlying pre-tax profit in Standard Chartered's Hong Kong business fell 17 per cent to US$378 million in the first quarter.Since joining the bank in 2015, chief executive Bill Winters has flattened its management and cut thousands of jobs to restructure its business. The lender returned to a profit in 2017 after two years of losses amid its restructuring, but is facing a particularly challenging environment.The bank warned in February that it expected income growth in 2020 below its medium-term target range of 5 per cent to 7 per cent because of "lower interest rates, slower global economic growth, a softer Hong Kong economy and the impact of the recent novel coronavirus outbreak".Standard Chartered, however, said it reduced its exposures to more vulnerable sectors to the downturn in recent years, saying its overall exposure to the oil and gas industry, for example, declined 18 per cent since the first half of 2015."Operationally, we feel very good about where we are and how we've performed," Winters said on a conference call with analysts. "[We are] extremely cautious about the environment and the outlook. We'll continue to be very focused on both."Overall, operating income, which is similar to revenue in the US, increased 11 per cent to US$4.4 billion. Net interest income fell by 4 per cent to US$1.8 billion.The investment banking unit reported a 4 per cent loss in underlying pre-tax profit to US$656 million in the first quarter, while underlying pre-tax profit in the commercial bank fell 45 per cent to US$102 million.Standard Chartered also has seen a backlash recently among Hong Kong investors after the Prudential Regulation Authority, its chief regulator located in the United Kingdom, asked the bank and HSBC to suspend investor payouts this year.The bank's shares have declined 8 per cent since it announced on April 1 it would cancel its dividend and suspend buy-backs this year. Top management at Standard Chartered have waived their cash bonuses this year and donate part of their salaries to efforts to fight the pandemic.Standard Chartered, which internally announced a hiring freeze in March, said on Wednesday it was working to manage its costs "prudently while doing everything we can to protect jobs"."If we are wrong about the pace of recovery and the global economy gets back on its feet rapidly " and we are seeing encouraging early signs of that happening in China " then the actions we are taking now will make us leaner and fitter to take advantage of the opportunities that will bring," the bank said.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.

    • StanChart sees key markets leading quick economic recovery after loan losses hit first quarter
      Reuters

      StanChart sees key markets leading quick economic recovery after loan losses hit first quarter

      Standard Chartered PLC on Wednesday said it expects its main markets to lead global economic recovery from the COVID-19 crisis as early as later this year, striking an optimistic note after increased bad loan provisions squashed quarterly profit. The emerging markets-focused lender's tone contrasts with other European lenders that have posted their first earnings since the new coronavirus depressed economic activity worldwide, saying it saw signs of possibly rapid recovery in China. "We expect a gradual recovery from the COVID-19 pandemic ... before the global economy moves out of recession in the latter part of 2020, most likely led and driven by markets in our footprint," the British-based lender said.

    • South China Morning Post

      HSBC, Standard Chartered and other bank results likely hit by bad loan provisions, analysts say

      Investors are bracing for potentially large loan loss provisions at HSBC, Standard Chartered and other big banks in Hong Kong as the coronavirus pandemic weighed heavily on economic activity around the world during the first quarter.The city's three currency-issuing lenders " HSBC, Standard Chartered and Bank of China (Hong Kong) " are all expected to report their first-quarter results this week beginning on Tuesday. Rivals DBS and Industrial and Commercial Bank of China (Asia) also are among lenders expected to update investors on their quarterly results this week.In February, many of the banks operating in the city warned that they expected to set aside additional reserves for bad loans in the first quarter. Still, they added that the risk was short term and manageable. That was before the economic environment worsened as the pandemic's spread shut down cities from New York to Singapore."When banks reported their results for the end of December, none of them had factored in the real impact of Covid-19," Paul McSheaffrey, a partner at accountancy firm KPMG, said. "We should definitely expect higher loan loss provisions coming through."When they reported their first-quarter results earlier this month, the biggest American banks, including Bank of America, Citigroup and JPMorgan Chase, set aside a collective US$25 billion for potential loan losses as they prepared to weather a global downturn not seen since the Great Depression. It was the biggest jump in loss provisions in a decade.Last week, the China Banking and Insurance Regulatory Commission said the non-performing loan (NPL) ratio for the nation's banking sector rose to 2.04 per cent at the end of March as the country's economy shrunk for the first time since 1976. The NPL ratio ended 2019 below 2 per cent.The coronavirus has infected more than 2.9 million people worldwide and disrupted industries across the board as health officials ordered companies to keep their employees at home. Covid-19, the disease caused by the virus, has killed more than 205,000 people around the globe.The global economy is expected to contract by 3 per cent this year, a much sharper downturn than the 2007-08 global financial crisis, the International Monetary Fund said on April 14. China and India are the only major economies expected to post positive growth in 2020, according to the IMF's projections.While generally well-capitalised, the health crisis could force Hong Kong's biggest banks to make similar moves to their American counterparts, analysts said.In March, Hong Kong's jobless rate rose to 4.2 per cent " its sixth straight monthly increase and the highest rate since November 2010 " and the city's economy is expected to contract further after falling into a technical recession in the third quarter. The US-China trade war and months of anti-government street protests battered the city's economy before the pandemic forced sectors ranging from airlines to hotels to a near standstill.In February, HSBC, which is based in London, but generated more than 80 per cent of its pre-tax adjusted profit in Asia last year, said it expected as much as US$600 million of provisions for additional loan losses if the pandemic dragged into the second half of the year " its worst-case scenario at the time.Since then, Hong Kong, HSBC's biggest market, closed its borders to non-residents and ordered more than 1,200 pubs and bars to close to stem the spread and the United Kingdom, its second-largest market, locked down all but essential travel outside the home beginning on March 23. Social distancing and other measures are expected to continue in both markets into May.HSBC, which reports its results on Tuesday, paused as many as 35,000 job cuts as the health crisis worsened in March, slowing a massive effort to overhaul the lender that has seen a reshuffling of senior management under chief executive Noel Quinn.HSBC is not alone in feeling the pain. Standard Chartered warned in February that it expected income growth to slow this year, but said it was difficult at the time to put a precise number on potential loan losses. DBS said in February it expected credit costs " the amount set aside for bad loans " to increase by four to five basis points for the year.Credit Suisse said on Thursday that it set aside 568 million Swiss francs (US$584 million) for credit provisions in the first quarter, primarily driven by the pandemic. The Swiss lender warned it was "still difficult to assess" the scale of the economic effects of the coronavirus and it may have to increase its reserves and further impairments in coming quarters.Morgan Stanley analyst Nick Lord said credit costs would be a "key concern" and investors would focus on guidance about he revenue outlook, asset quality, and dividend policy at the city's biggest lenders."Although banks have been highlighting that underlying asset quality remained benign, we expect them to top up provisions to build up reserves for future periods," Morgan Stanley analyst Nick Lord said in a research note Thursday.McSheaffrey, the KPMG partner, said the city's banks will face a "challenging" first half of the year because of the increase in bad loans and impairments, but operating conditions could be difficult into 2021 because of historically low-interest rates in the US and Hong Kong."Banks generally do not benefit from decreasing interest rates," McSheaffrey said. "They generally benefit from increasing interest rates. That's going to impact revenue and general activity."Another question for the city's banks will be whether they will continue to pay dividends or hold onto capital in this operating environment.HSBC and Standard Chartered both cancelled their final dividend payments for 2019 and suspended payments this year after a request from their chief regulators in the UK, sparking a revolt among investors in Hong Kong. Top executives at both banks agreed to forgo their cash bonuses this year amid the backlash.The Hong Kong Monetary Authority has said it does not believe the city's financial institutions need to suspend investor payments because the banking sector is well capitalised. Regulators in Britain, Europe and New Zealand have all asked banks to suspend their dividends to have capital on hand to help lend to the real economy in light of the global downturn.Sonny Hsu, senior credit officer for financial institutions at Moody's Investors Service, said banks in Hong Kong are likely to expect gross domestic product growth to very weak in the city and the rest of the region this year, which will lead to increased reserves for bad loans."The provisions will likely be magnitudes higher than what they forecast [earlier this year]," Hsu said.Sign up now and get a 10% discount (original price US$400) off the China AI Report 2020 by SCMP Research. Learn about the AI ambitions of Alibaba, Baidu & JD.com through our in-depth case studies, and explore new applications of AI across industries. The report also includes exclusive access to webinars to interact with C-level executives from leading China AI companies (via live Q&A; sessions). Offer valid until 31 May 2020.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.

    • Reuters

      Standard Chartered expects Saudi GDP to shrink by 4.5% on oil production cuts

      Standard Chartered said it expects Saudi Arabia's gross domestic product to contract by 4.5% year on year in 2020 against a previous expectation of a 5% growth, mainly because of oil production cuts agreed among international crude producers. The United Arab Emirates will see its GDP drop by 4.6% this year against a previous 1.4% growth estimate, the bank said in a statement.

    • Standard Chartered, Astra International agree to reduced sale price for stake in Indonesian bank
      Reuters

      Standard Chartered, Astra International agree to reduced sale price for stake in Indonesian bank

      Asia-focused lender StanChart said it now expects its unit, which owned Permata stake, to receive a consideration of about $1.06 billion, down from the $1.3 billion estimated in December, citing the revised valuation, reduction in Permata's equity and depreciation of the Indonesian rupiah. In December, Thailand-based Bangkok Bank agreed to buy an 89.1% stake in Indonesia's Bank Permata for about $2.7 billion, in the first major overseas acquisition for a Thai bank.

    • Standard Chartered bank tells employees to stay off Zoom
      Reuters Videos

      Standard Chartered bank tells employees to stay off Zoom

      Video and online chat platform, Zoom, has surged in popularity during this time of lockdown and self isolation. But it recently came under scrutiny for privacy lapses. And last week, Standard Charted became the first big bank known to tell employees to stay off Zoom. According to a memo seen by Reuters, the ban is over cybersecuriy concerns. The London-based bank is the latest to distance itself from Zoom after interlopers exposed security flaws. Some burst bursting into strangers' video chats in the nude, inserted lewd images into presentations or fired off racial slurs. The bank's memo also warned against using Google Hangouts for virtual gatherings. Experts say Zoom and Hangouts don't offer the level of encryption of conversations compared to rivals like Cisco Webex, Microsoft Teams or BlueJeans Meetings. A Standard Chartered spokeswoman declined to comment over the memo. But she said cybersecurity remains a top priority for staff. Zoom in March had about 200 million people using its system every day, up from 10 million last year. The company did not immediately respond to a request for comment.

    • Exclusive: Stay off Zoom and Google Hangouts, Standard Chartered chief tells staff
      Reuters

      Exclusive: Stay off Zoom and Google Hangouts, Standard Chartered chief tells staff

      Standard Chartered Plc <STAN.L> is the first major global bank to tell employees not to use Zoom Video Communications Inc <ZM.O> during the coronavirus pandemic due to cybersecurity concerns, according to a memo seen by Reuters. The message, sent by Chief Executive Officer Bill Winters to managers last week, also warned against using Alphabet Inc's <GOOGL.O> Google Hangouts platform for virtual gatherings. Neither service offers the level of encryption of conversations that rivals like Cisco System Inc's <CSCO.O> Webex, Microsoft Corp's <MSFT.O> Teams or Blue Jeans Network Inc do, industry experts said.