Standard Chartered is next bank to issue profit warning due to coronavirus effects

A man walks past a Standard Chartered sign in Hong Kong on February 27, 2020. Picture: AFP/ISAAC LAWRENCE

The virus has led to a shutdown of factories in China and wide-ranging travel disruption that has interrupted global trade. Standard Chartered’s warning mirrors that from rival HSBC, which said last week that the outbreak could lead to as much as $600m in additional loan losses if it continues into the second-half of 2020.

Standard Chartered is heavily dependent on Asia and particularly Greater China. It derived about 68% of its 2019 revenues from Asia, an even higher proportion than HSBC, which generated roughly half its 2019 revenue from the region. “We view the results as mixed with weaker than consensus revenues, offset by better than expected capital levels and another buyback,” said analysts at Goldman Sachs in a note where they maintained a ‘buy’ rating on the bank’s shares.Standard Chartered said it plans to buy back up to $500m worth of shares and will review the potential for a further buyback when it completes the sale of its stake in Indonesia’s PT Bank Permata.

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