Normal Chartered Third-quarter Revenue Slides, However Beats Estimates On Enhancing Mortgage Loss Outlook

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HONG KONG/LONDON: Normal Chartered booked a smaller-than-expected 40% slide in quarterly revenue because the lender lowered its mortgage loss expectations linked to the coronavirus pandemic, additionally saying shopper demand was more likely to improve subsequent yr.

Credit score impairment prices got here in at $358 million for the three months ended Sept. 30, up 27% from the identical interval final yr, however properly under the previous quarter’s $611 million and a consensus estimate of $614 million.

StanChart stated the outcomes strengthened its view that credit score impairments could be decrease within the second half of the yr than the primary, as lenders worldwide report mortgage losses stabilising.

The important thing query now going through analysts and traders is whether or not numerous authorities assist measures resembling emergency loans and furlough schemes have genuinely mitigated losses, or merely pushed them again into subsequent yr.

“Given the acute financial pressures referring to the persistence of COVID-19, partially addressed by means of the efficacy of presidency assist measures, it’s not attainable to reliably predict the quantum or timing of future impairments,” StanChart stated.

The decrease provisions helped it submit underlying pretax revenue of $745 million, above the $502 million common of analysts’ forecasts compiled by the financial institution.

“Decrease rates of interest proceed to influence earnings however we stay well-positioned to fulfill our monetary targets, albeit with some delay,” Chief Govt Invoice Winters stated in an earnings assertion.

StanChart’s Hong Kong-listed shares have been down 1% after the outcomes, underperforming the broader market.

The pandemic has introduced on an ideal storm for a lot of world banks, propelling them to chop prices and restructure additional as unhealthy loans mount, lending margins are squeezed and rates of interest hit rock-bottom and even flip unfavorable.

StanChart, which is concentrated on Asia, Africa and the Center East, introduced final month it could merge a number of companies and minimize its variety of senior executives.

Each StanChart and rival HSBC , whose shares have almost halved in worth this yr, are additionally grappling with political uncertainty in Hong Kong – a key marketplace for each of them.

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