StanChart resumes dividend distribution as profits rise as a result of the global recovery | World Weekly

StanChart resumes dividend distribution as profits rise as a result of the global recovery

 | World Weekly

Standard Chartered PLC Updates

Standard Chartered became the latest bank to post a profit hike and resume dividend payments amid an improving economic outlook in the second year of the coronavirus pandemic.

The emerging markets-focused bank posted a pre-tax profit of $1.15 billion in the second quarter, up 55 percent from the same period last year and topping analysts’ consensus estimates of $1.1 billion.

Earnings are down compared to the first three months of the year, when the bank made $1.41 billion. In the first half of the year, Standard Chartered reported pre-tax earnings of $2.56 billion, an increase of 57 percent over the same period in 2020.

StanChart also announced a $250 million share buyback and said it would pay an interim dividend of 3 cents per share, for a total of $94 million. The decision followed similar moves by bigger rival HSBC this week, which resumed paying an interim dividend of 7 cents per share after earnings jumped from $1.1 billion to more than $5.1 billion.

Bill Winters, CEO of Stanshart Group, said he was “encouraged” by the performance despite the “uneven” recovery from Covid-19 in the company’s largest markets in Asia, the Middle East and Africa.

“We believe we will soon be back on the same track of performance that we were on before the pandemic set us back,” he said.

“The first half of 2021 was a recovery period, albeit uneven,” Winters added. “Across key markets for our footprint . . . the timeline for full economic recovery and social openness will be longer due to different country vaccination programmes, leading to lower confidence in some parts of Asia relative to the West at the moment.”

StanChart’s results improved by a record for the first half of the wealth management business, as income grew 23 percent. It also canceled $47 million in loan loss provisions that were set aside to mitigate the effects of the coronavirus crisis. That was significantly lower than at HSBC, which announced the release of another $300 million in reserves this week.

The bank generated the bulk of its income in Asia, which posted $2.2 billion in pre-tax profits — nearly 90 percent of the total — in the first half of the year.

It said global costs rose 8 percent to $5.1 billion in the first half, mainly due to larger bonuses paid to retain critical employees when earnings rebounded this year.

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