HONG KONG/LONDON: Standard Chartered PLC beat forecasts on Thursday with a 5.5% rise in its first-quarter pretax profit, as the income boost from higher interest rates and a robust performance from its markets trading business offset a surge in credit losses.

The bank, which makes the bulk of its revenue and profits in Asia, saw its credit impairments worsen in 2024, with a $165 million writedown in the first three months, compared to $20 million a year earlier.

The bulk of the credit impairment was accounted for by the bank's wealth and retail banking division. The British bank has, however, made provisions worth $1.2 billion in total in relation to the China commercial real estate sector, it said.

StanChart had taken a total of $850 million in writedowns in the previous quarters on its stake in China's Bohai Bank , which like its peers suffered from a slowing Chinese economy and the deepening crisis in the property sector.

Chinese authorities have been ramping up measures over the last few months to prop up the troubled sector, but analysts say many of the policies are piecemeal in nature or have only limited, short-term impact.

StanChart's Hong Kong-listed shares jumped 4% on Thursday after the results to their highest level in nearly seven months, while the main local index was trading 2.4% higher.

While StanChart's investment banking unit profit rose 13% in the quarter, the overall performance showed the challenge Chief Executive Bill Winters faces in boosting a share price which he himself bemoaned as underwhelming when the bank last reported results.

Despite the challenges, the bank said it was maintaining the performance guidance targets it set out earlier this year.

StanChart's pretax profit in the quarter was $1.91 billion. That compared with $1.81 billion a year earlier and the $1.39 billion average of 13 analyst estimates compiled by the bank.

"We delivered a strong set of results in the first quarter of 2024, with double-digit growth in income and positive operational leverage," Winters said in the earnings statement.

"We remain confident in the delivery of our financial targets and are maintaining our full year 2024 guidance." The lender said its profit from joint ventures in the first quarter slipped to $6 million from $18 million as profit at Bohai Bank fell.

StanChart also said it booked a $100 million provision for expected compensation fees for customers in South Korea who bought certain equity linked securities which ended up causing them a loss.

Regulators in the country have advised that banks in the country who sold such products should reimburse customers.

 - Reuters