Standard Chartered PLC on Thursday upped its annual income growth outlook, as the bank enjoyed a stellar first quarter from its Financial Markets business and improving margins.

In the three months to March 31, Asia-focused StanChart recorded pretax profit of $1.49 billion, up 6% from $1.41 billion reported in the same period the year prior.

The bank started to build credit reserves once again, booking $197 million in credit impairments in the first quarter, sharply higher from $17 million the year before.

Operating income rose 9% to $4.29 billion from $3.94 billion. Net interest income rose 8% to $1.79 billion from $1.66 billion, while ’other’ income was 10% higher at $2.50 billion from $2.28 billion.

‘A record Financial Markets performance and an expansion in the net interest margin was partly offset by lower Wealth Management income,’ StanChart explained.

The bank’s adjusted net interest margin improved to 1.29% from 1.22%.

Chief Executive Bill Winters said: ‘Our first quarter performance was strong despite the volatile macro environment. Our profit before tax grew 4% year on year, with strong underlying business momentum.

‘I am also pleased by the early progress we have made against the five strategic actions we outlined in February and we are on track to deliver 10% return on tangible equity by 2024, if not earlier.’

StanChart’s cost-to-income ratio improved in the first quarter, dropping to 62.1% from 64.2% the year before.

It ended March 31 with a CET1 ratio of 13.9%, slipping from 14.0%.

Geographically, operating income in Asia slipped 1% to $2.80 billion from $2.82 billion, while in Africa & Middle East, income was up 12% to $659 million from $590 million. In Europe & Americas, operating income jumped 56% to $857 million from $550 million - driven, mainly, by the Financial Markets business.

Group Financial Markets income - which sits in StanChart’s Corporate, Commercial & Institutional Banking unit - surged 32% to $1.72 billion, with its Macro Trading business seeing income jump 40% to $940 million.

Looking ahead, StanChart has strengthened its outlook due to the bank’s ‘strong’ performance to kick off 2022.

It now expects income growth ‘slightly’ ahead of its previously guided 5% to 7% range.

StanChart shares were up 7.9% to HK$51.70 in Hong Kong on Thursday afternoon.

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