Asia-focused Standard Chartered back in the black
Banking giant Standard Chartered swung back into the black as it shrugged off weak commodity prices and volatile markets in China.
The Asia-focused bank said statutory pre-tax profits hit 589 million US dollars (£404 million) in the three months to March 31, up from a 4.1 billion US dollar loss (£2.8 billion) in the fourth quarter last year.
Shares also stepped up more than 9%, as investors cheered the better-than-expected results and a significant fall in the number of bad loans
It revealed loan impairment losses reached 471 million US dollars (£323 million) in the first quarter of this year, down from 1.13 billion US dollars (£756 million) in the three months to the end of December 2015.
It added that operating income was down 24% to 3.3 billion US dollars (£2.3 billion) in the first quarter, compared to the same period last year.
Group chief executive Bill Winters said: "Although trading conditions in the first quarter remained challenging, we continue to make good progress on our strategic objectives.
"The management team is in place, we are taking action to improve recent income trends, managing costs tightly, progressing on key investments, making early progress on the exit of the liquidation portfolio, and maintaining strong levels of capital and liquidity."
The turnaround in performance comes after the bank announced its first annual loss in more than a quarter of a century in February after it was hit by hefty write-downs amid plunging commodity prices and weaker Indian markets.
Mr Winters unveiled his turnaround strategy in November, which included plans to slash 15,000 jobs worldwide and make a 5.1 billion US dollars (£3.3 billion) cash-call to investors.
In the trading update, he said the bank would hit its restructuring cost target of three billion US dollars (£2 billion) by the end of the year while it was also on track to deliver one billion dollars (£686 million) of gross cost savings in 2016.
Steve Clayton, head of equity research at Hargreaves Lansdown, said the bank was improving but Mr Winters has more work to do.
He said: " Things aren't great at Standard Chartered so far in 2016, but they're a lot better than they were at the end of last year. Investors duly let out a sigh of relief and pushed the share price up in early-morning trading.
"When emerging markets submerge, a business like Standard Chartered will always feel the pain, especially because they raised their risk appetite during the bull years. It is now down to CEO Bill Winters and his team to sort out the mess."
He added: "In the long run, Standard Chartered's emerging market bias could be a huge positive. Right now, though, the bank faces what could be quite a lengthy turnaround process."