James Moore: Standard Chartered must show its mettle after this setback
Outlook Are the wheels falling off at Standard Chartered? We're a way off that. But the "world's best bank" is facing some unaccustomed challenges. When was the last time its shares dropped more than 4 per cent after a trading statement?
After an unbroken procession of profit rises going back as long as anyone can usefully remember, including during the financial crisis, the bank yesterday admitted its first quarter was less than stellar. Operating profits fell.
This may be a blip. The "outlook" part of StanChart's trading statement was more upbeat. All the same, coming hot on the heels of last year's fine from the US authorities over money-laundering allegations, StanChart is facing some unaccustomed adversity.
Its management have been cheered from the rooftops, and garlanded with accolades and bonuses. They may indeed deserve some praise, but their bank has also been the beneficiary of some unusual circumstances.
It doesn't have much business in those parts of the world that really suffered as a result of the credit crunch and as such, it has been able to move in when rivals which do have fled. Gary Greenwood, an analyst at Shore Capital, has, however, noted increased competition recently from other foreign banks in Asia.
Standard Chartered has provided the City with some comfort – it should meet forecasts – but it looks to have a fight on its hands and we may now be about to find out just how good its much-vaunted management team really is.
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