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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Standard Chartered    STAN   GB0004082847

STANDARD CHARTERED (STAN)
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Standard Chartered : StanChart factors planned U.S. trade tariffs into lending

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03/08/2018 | 03:04pm CEST
FILE PHOTO: People walk outside the main branch of Standard Chartered in Hong Kong

LONDON (Reuters) - U.S. President Donald Trump's proposed trade tariffs are already influencing lending decisions by Britain's Standard Chartered (>> Standard Chartered) and could have an impact on its profitability, its Chief Financial Officer told Reuters.

LONDON (Reuters) - U.S. President Donald Trump's proposed trade tariffs are already influencing lending decisions by Britain's Standard Chartered and could have an impact on its profitability, its Chief Financial Officer told Reuters.

The Asia, Africa and Middle East-focused bank has been taking into consideration the effect Trump's plan to hike duties on steel to 25 percent and on aluminium to 10 percent could have on loans to sectors that might be hit, Andy Halford said.

"I think it would be remiss of us not to be factoring it into lending decisions. But what it exactly is obviously will need a little bit of thought," he said in an interview.

Trump is this week expected to sign a presidential proclamation to establish the tariffs, which he says will stop cheap imports from countries like China hitting U.S. industry and jobs.

His proposals sparked retaliatory threats from China and Europe and fears of a global trade war, rattling markets and groups like Standard Chartered that have bet big on free trade.

StanChart Chief Executive Bill Winters on Thursday said that there are some signs that such a war could be avoided as the U.S. softens its stance.

"The good news is, from what we saw yesterday, the U.S. is beginning to moderate its stance on steel and aluminium, and if things stay relatively moderate to some of the fears, there won’t be a big impact at all,” Winters said on the sidelines of the Saudi-UK CEO forum in London.

The bank is more focused on trade and commodities than many of its global peers, and it is trying to boost its business with U.S. customers who trade with emerging markets. Stanchart makes 80 percent of its profits in Asia.

TIT FOR TAT

The bank tested the impact of a severe world trade downturn triggered by rising protectionism in its 2017 stress test, an indication of how important trade flows are for its bottom line.

Halford said it was business as usual for a large part of the bank, as the majority of its clients were not affected. But if protectionism spread beyond the U.S. or Americas it will have to extend the review of the risks it poses.

"If there ends up being a sort of tit-for-tat and other sectors are brought into it then we'll extend the review."

The tariffs could also impact the speed at which StanChart is able to reach its new profit target, Halford said.

StanChart last month unveiled a new medium-term goal of an 8 percent return on equity, as it recovers from a restructuring that saw the key profitability metric fall into the negative.

While it has not announced the timetable for achieving the goal, Halford said analysts predicting the bank should get there by 2021 if it grows at its current pace are not wrong.

"If this U.S. protectionist rhetoric does take hold, then maybe it could be a little bit longer," he said.

The bank last year posted a return on equity of 3.5 percent, up from 0.3 percent. Halford said revenue growth, income from rising global interest rates and a reduction in Britain's bank levy should all contribute to it hitting the 8 percent goal.

(Additional reporting by Karin Strohecker, Editing by Silvia Aloisi and Alexander Smith)

By Emma Rumney and Lawrence White

Stocks treated in this article : Standard Chartered, Standard Chartered PLC
Stocks mentioned in the article
ChangeLast1st jan.
STANDARD CHARTERED -0.09% 637.2 Delayed Quote.-18.25%
STANDARD CHARTERED PLC -1.21% 65.25 End-of-day quote.-19.84%
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Financials ($)
Sales 2018 15 308 M
EBIT 2018 4 326 M
Net income 2018 2 255 M
Debt 2018 -
Yield 2018 2,59%
P/E ratio 2018 12,44
P/E ratio 2019 9,95
Capi. / Sales 2018 1,80x
Capi. / Sales 2019 1,69x
Capitalization 27 554 M
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Technical analysis trends STANDARD CHARTERED
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Consensus
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Mean consensus HOLD
Number of Analysts 20
Average target price 10,0 $
Spread / Average Target 20%
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Managers
NameTitle
William Thomas Winters Group Chief Executive Officer & Director
José Viñals Chairman
David Whiteing Chief Operating Officer
Andrew Nigel Halford Group Chief Financial Officer & Executive Director
Michael Gorriz Group Chief Information Officer
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