StanChart profits fall amid emerging-market currency weakness

8th May 2014 08:06

- Profits, revenues fall in first quarter- EM currency weakness provides a drag- Market conditions 'difficult'Profits at Standard Chartered declined in the first quarter as difficult market conditions persisted, the emerging markets-focused bank said on Thursday.The group said that while the current trading momentum is ahead of the second half of 2013, its performance in the first three months of 2014 was adversely affected by local currency weakness, particularly the Indian rupee and Indonesia rupiah.StanChart, which generates the majority of its earnings in Asia, said operating profits were down by a "high single-digit percentage", in line with its expectations. On a constant currency basis, operating profits declined by a "mid single-digit percentage".Meanwhile, revenues fell by a "low single-digit percentage" but were slightly higher than last year at stable exchange rates.Margins "stabilised" but still remained at compressed levels and "pressures common to the industry" continued to impact the performance in the bank's Financial Markets business, particularly in the Rates unit."The difficult market conditions that began last year have continued into the first quarter of 2014 and remain through April and into May," StanChart said.The bank highlighted "broad based growth" across a number of markets during the period, but this was offset by weaker performances from other regions such as Korea where income fell by $110m year-on-year. Excluding Korea, group income was said to be flat over the year."Despite a somewhat challenging external environment, we continue to support our clients' growth, whilst managing tightly our costs, risks and capital," said Chief Executive Peter Sands."Our performance so far this year is in line with our expectations. On April 1st we completed the reorganisation announced in January. These changes align the organisation to reflect our refreshed strategic priorities."BC