Standard Chartered Reports Jump in FX Income in FY20

The Bank reported $1.29 billion FX income in 2020, compared to $1.12 billion in 2019.

Standard Chartered announced its financial results for Q4 and the full-year of 2020. Despite a slight dip of 3% in net income, the bank reported a jump in Foreign Exchange income. Standard Chartered reported a 15% jump in FX income for FY20, compared to FY19.

According to the official press release, the bank’s financial markets-related income reached $3.85 billion last year, compared to $3.25 billion in 2019. The commodities-related income jumped 35% to $223 million.

For the last quarter of 2020, FX income increased marginally to $267 million, compared to $264 million during the same period in 2019. The credit and capital markets also performed well for the bank with $175 million revenue in Q4 of 2020, compared to $125 million in Q4 of 2019.

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Commenting on the recent financial results, Bill Winters, Group Chief Executive at Standard Chartered, said: “We are weathering the health crisis and geopolitical tensions very well, our strategic transformation continues to progress and our outlook is bright. We remain strong and profitable, although returns in 2020 were clearly impacted by higher provisions, reduced economic activity, and low-interest rates, in each case the result of COVID-19. Looking ahead, our unique exposure to the most dynamic markets in the world puts us in a great position to benefit from the clear signs of recovery there.”

Outlook for 2021

The weakest areas for Standard Chartered in 2020 were transaction banking and corporate finance. The bank reported a sharp decline of 19% in transaction banking income along with a dip of 2% in corporate finance income. Standard Chartered is expecting similar performance in 2021 as well due to the uncertainties related to the global health crisis.

“Overall income in 2021 is expected to be similar to that achieved in 2020 at constant currency given the full-year impact of the global interest rate cuts that occurred in 1H’20, which will likely cause 1H’21 income to be lower than last year. The FY’21 net interest margin should stabilize at marginally below the 4Q’20 level of 1.24%. Our performance in the opening weeks of this year gives us the confidence that we are on the right track with strong performances in our less interest-rate-sensitive Financial Markets and Wealth Management businesses. We expect income to return to 5-7% growth per annum from 2022,” the bank mentioned in the official announcement.

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