Standard Chartered said it would miss its financial targets this year and warned it was too early to predict the total cost of the coronavirus outbreak.
The Asia-focused bank said on Thursday it was unlikely to reach income growth targets of between 5% and 7% for 2020, as Covid-19 spreads across some of its key markets, including Hong Kong, mainland China and Singapore.
Its chief executive, Bill Winters, said the bank, which has its headquarters in London, was struggling to predict the impact of the outbreak. “We have had a good start to 2020 but we recognise there are some substantial headwinds that are mounting. And most obvious is the coronavirus, which is playing itself out in ways that none of us as yet fully understand [in terms of] how exactly this will progress,” he said.
HSBC to cut 35,000 jobs worldwide as profits plunge
“Had we not had the combination of substantially lower interest rates, substantially slower levels of economic activity and then the uncertainty around the virus, today we would not be talking about delaying the achievement of our financial targets.”
Standard Chartered shares fell 4.6% to 564p in morning trading, the lowest level since November 2018.
The bank, which is focused on Asia, the Middle East and Africa, started offering relief measures to borrowers in affected areas earlier this month, including interest-only mortgage payments for up to six months.
Lenders are at risk of seeing bad loans rise if borrowers start to fall behind or default on payments. Last week HSBC, which counts Hong Kong as its largest market, said it could end up taking a charge of up to $600m (£464bn) to cover the fallout.
However, Standard Chartered’s chief financial officer, Andy Halford, refused to provide any guidance on how much his bank may be forced to put aside. “We expect March will be affected more by the coronavirus. The question is how long it goes on. How many countries it impacts is clearly a question which most of us, I think, find quite difficult to answer with clarity at this point in time, so we’ve not put a number on it.”
The comments were made as Standard Chartered reported full-year results, which showed a 46% rise in pre-tax profit to $3.7bn (£2.9bn).
Source: Read Full Article