Standard Chartered sees shares hammered despite 82% rise in H1 profit

Standard Chartered plc, which operates a banking network in Nigeria, saw its share price fall by 5.5 percent despite announcing a rise in half year profit of as much as 82 percent.

An executive at the emerging markets focused financial institution say the bank still has a long way to go to improve returns.

The bank, which operates across Asia, the Middle East and Africa, reported a statutory pre-tax profit of $1.8bn for the first six months of this year, compared with $963m in the same period last year.

Revenues were up 3 percent at $7.2bn. The bank’s operating expenses rose 7 percent to $4.9bn. Loan impairments almost halved to $655m. Analysts had on average expected first-half revenues of $7.2bn and pre-tax profits of $1.8bn.

The bank had “an encouraging start to 2017, making steady progress against our strategic objectives,” according to Bill Winters, its chief executive.

However, the bank said on Wednesday that the underlying return on equity in the first half was 5.2 percent. Winters said the target continues to be to get it above 8 percent by 2020, lower than targets from rivals who started their post-financial crisis restructurings years earlier.

Standard Chartered’s earnings largely met analyst expectations. Revenue in the second quarter was $3.61 billion, up from $3.47 billion in first-half 2016. Net profit for the first half climbed to $971 million from $465 million a year earlier.

The bank has fallen out of favour with investors, with its shares trading at lower valuations than peers because of the continuing restructuring.

Winters said the bank has done much of the heavy lifting to get back on track, but that the “external environment is still weighing on our full potential.”