Standard Chartered Reveals Q1 Performance in Riddles

PUBLISHED: 08 May 2013 @ 20:41 | Comments (0) | More info about Kenneth G. Mondero

Breaking the news gently must have been the goal of Standard Chartered plc (LSE:STAN) on releasing its performance for the first quarter of the year – the only one of the BIG FIVE in London that does that.

But no matter how hard one tries to carefully craft the words, the glaring truth of the matter will never be missed and Standard Chartered earlier today has suffered a blow on the London Stock Exchange in early morning trading.

Whoever advised that “Overall the Group’s operating profit in the first quarter was slightly down on the first quarter of 2012” would do for the meticulous scrutiny of analysts and investors alike is mistaken. On a more specific note that is still subject to estimates, the bank said its consumer and wholesale banking were down by a “mid-single digit percentage”, respectively.

In fact, at 10:30 AM GMT, shares of the UK’s second highest valued bank by market capitalisation, were down 5% to £16.16 a share.

The truth is, one gets even more speculative when being told in riddles what is happening at the bank he owns (at least a fraction of it). But for sure, Standard Chartered is aware of such probability and may probably be expecting it. Instead of putting in clear form how much the bank has lost between January and March this year, they chose to talk in ambiguous terms.

I can’t blame them either. What company will ever say in boring prose that it has lost this much and suffer the vicious reaction in the market? It has to come up with a way to present its balance sheet to soften the blow. In contrast, I’d say that if Standard Chartered ended the quarter with so much profit, I would bet it will have presented the good news with so much gusto and flood the article with figures.

Despite that, Group Chief Executive, Peter Sands, gave credit to the bank for its resilience despite the dynamics that hit its quarter performance and will continue to remain in the markets they are engaged in.

“We are in the right markets and remain confident in the outlook for our business,” Sands said in a statement.

At 11:17 GMT, shares of the FTSE 100 firm slightly recovered but were still down 4.7% to £16.19, or a 80 pence drop from Friday’s closing share price.

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