Standard Chartered's first quarter profits decline

8th May 2013 08:45

Standard Chartered's operating profit fell in the first quarter following an increase in loan impairment and pressure on margins.The British multinational banking and financial services company said it had a strong start to the year in January but momentum slowed later in the quarter, according to a trading update released Wednesday.The consumer banking division's operating profit for the first quarter of the year was down by a mid-single digit percentage as loan impairment increased by a double digit percentage.Credit cards and personal loans and mortgages grew income at double digit rates and wealth management income was up by a high single digit percentage, ahead of the run rate seen in 2012 with improved investor sentiment.However, deposit income fell by a mid-single digit rate reflecting ongoing margin pressure despite growth in customer balances. Expenses were up by a high single digit rate despite keeping a tight rein on costs to create capacity for investment.The firm's wholesale banking business also saw operating profit decline by a mid-single digit percentage. While the division continued to build on high levels of client activity and strong volumes across markets, pressure on margins and spreads intensified during the quarter.Lower income, higher costs and loan impairments also affected the arm's results."We remain focused on continuing to grow the business, building on our long-standing relationships with our clients and customers, on maintaining our strong balance sheet, and on keeping a firm grip on costs and risks," said Chief Executive, Peter Sands. "We are in the right markets and remain confident in the outlook for our business."Shares fell 5.88% to 1,600p at 09:06 Wednesday.RD