Analyst Note| Michael Wu, CAIA |
Standard Chartered’s second-quarter result was within expectations. Underlying profit before tax was USD 1.24 billion compared with USD 733 million the same period last year, mainly due to lower credit costs. Operating income was slightly lower against last quarter and the same period last year, mainly due to weaker fee income, as both comparable periods benefited from stronger capital market activities. A more normalised period in the second quarter saw lower fee income across most products, in particular wealth management income and also Treasury income. With loan growth at 2% against last quarter and net interest margin steady at 1.22% quarter on quarter, net interest income was 3% higher against the first quarter. Excluding interest on impaired assets, normalised net interest margin was 1.17%, and this is expected to be sustained in the second half.