Markets report: Divi talk fails to lift Standard Chartered

Louis Ashworth
·2-min read
Standard Chartered
Standard Chartered

A disappointing set of third-quarter results sent Standard Chartered shares down for a fourth day.

It drew a downbeat reception from markets despite beating expectations on profit and dangling the prospect of a resumed dividend.

The emerging markets-focused lender posted an underlying profit before tax of $745m (£576m) for the third quarter – down 40pc year-on-year, but higher than predicted. However, analysts flagged a miss of profit with expected credit losses taken into account, and also warned costs looked high.

The FTSE 100 group said it “will consider” resuming shareholder returns at its full-year results in February, saying its “strong capital position” allows it to do so.

Charges on bad loans came in at $358m for the period – well below consensus ($614m) and significantly lower than in the second quarter ($611m). Citi’s Ronit Ghose highlighted the bank’s warning that fourth-quarter revenues are usually weaker.

Shares dropped 7.7pc to 345p, leaving the group near the bottom of the FTSE 100.

The index as a whole ended flat, marking an end to several day of falls following a shaky session. After a strong initial start, European equities dived in the late morning before Christine Lagarde settled nerves by strongly hinting the European Central Bank would launch further stimulus at its December meeting.

The third-quarter reporting season continued to produce moves among London’s blue chips: Royal Dutch Shell jumped 3.7pc to 898.3p after raising its dividend, whiles Lloyds Banking Group also jumped after its profits came in at nearly double expectations.

Less fortunate were BT and WPP. The former dropped 2.5pc to 99.12p, having initially risen after raising its earning guidance. The group narrowly missed revenue expectations in what boss Philip Jansen called “exceptional circumstances”. WPP also fell 2.5pc, to 599.80p, after warning it expected sales to drop over the full year as the pandemic batters the advertising industry.

Elsewhere among blue-chips, Smith & Nephew shares dropped 1.8pc to 1,359.50p after narrowly missing revenue estimates for the third quarter. The medical instrument company posted sales of $1.2bn, down 3.7pc year on year. It continued to withhold guidance for the full year, warning it was difficult to predict the future course of the virus. The FTSE 250 dropped 0.4pc, with nearly two-thirds of the mid caps falling.

Pharmaceuticals group Indivior fell 1.7pc to 104.30p after restating its guidance and saying it expected to be profitable on an adjusted pretax basis next year.

Hilton Food rose 0.3pc to 1160p after saying it has traded in line with expectations since mid-July.