Results round-up

Standard Chartered posted a 59% drop in first-quarter profit amid depressed commodity prices, volatility in Chinese markets and weak emerging market sentiment, but investors welcomed signs the bank was beginning to turn things around as loan impairments dropped.

In its interim management statement for the quarter ending 31 March, the group reported statutory pre-tax profit of $589m (£405m) versus $1.4bn in the same quarter a year ago.

StanChart’s core equity tier one ratio – a key gauge of capital strength – was up 50 basis points since year end to 13.1%, benefitting primarily from the 3% reduction in risk-weighted assets, profits in the period and a small currency translation gain.

First-quarter revenue was down 24% on the same period in 2015 to £3.3bn, which was 6% below consensus estimates, but broadly stable compared to the fourth quarter. The bank said currency translation accounted for 3% of the year-on-year income decline and business divestments represented a further 2%.

Impairment losses on bad loans improved slightly to $471m from $476m in the same quarter last year, but significantly from $1.13bn in the final quarter of 2015.

Underlying pre-tax profit came in at $539m compared with a loss of $876m in the same quarter a year ago.

Meanwhile, total operating costs fell 10% year-on-year to $2.2bn. Excluding the benefits from currency translation, costs were down 6%, reflecting restructuring actions taken towards the end of 2015 and business disposals.

The weak oil price pushed exploration and refining giant BP to a $485m first quarter replacement cost loss, compared with a profit $2.1bn profit in the same period last year.

Underlying replacement cost profit was $532m for the quarter, compared with $2.57bn a year ago and well above analysts consensus forecasts of a $140m loss.

Pre-tax losses were $865m compared with a $2.2bn profit in the first quarter of 2015.

“Despite the challenging environment, we are driving towards our near-term goal of rebalancing BP's cash flows. Operational performance is strong and our work to reset costs has considerable momentum and is delivering results. Furthermore, development of our next wave of material upstream projects is well on track," said chief executive Bob Dudley.

"Market fundamentals continue to suggest that the combination of robust demand and weak supply growth will move global oil markets closer into balance by the end of the year.”

Organic capital expenditure in the first quarter was $3.9bn compared to $4.4bn in the first quarter of 2015. BP said it now expects total organic capital expenditure in 2016 to be around $17bn and, in the event of continued low oil prices, sees flexibility to move to $15bn-$17bn in 2017.

BP said cash costs over the last four quarters were $4.6bn lower than in 2014, adding that it expected those for 2017 to be $7bn than for 2014.