Standard Chartered stumbled after its full-year profits fell short of expectations. Shares in the Asia-focused banking giant slipped 1.7pc, or 9.4p, to 558p after it reported a profit for 2021 of £2.5bn which, while more than double 2020’s figure of £1.2bn, was below the £2.8bn predicted by analysts.
Income for the year, meanwhile, dipped to £10.7bn from £10.8bn. The group’s plans for a £550m share buyback following the profit jump also failed to appease the market.
Standard Chartered was upbeat for the years ahead, predicting that rising interest rates will add 3pc of growth to its income levels on top of an underlying rise of 5pc-7pc. As a result, the bank expected its income to grow by 8pc-10pc annually by 2024.
Standard Chartered stumbled after its full-year profits fell short of expectations
The benefit of rising interest rates may bode well for other major UK banks including Natwest (down 1.3pc, or 3.1p, at 240.3p), which reports results today, as well as Lloyds (down 1.2pc, or 0.64p, at 51.29p), Barclays (down 1.7pc, or 3.36p at 192.64p) and HSBC (down 1.5pc, or 8.2p, at 540.1p) which will deliver their numbers next week.
Sophie Lund-Yates, an analyst at Hargreaves Lansdown, said Standard Chartered’s multi-million pound share buyback was a trend that was expected to be seen across other financial institutions.
‘It [the share buyback] suggests a tangible effort to return excess uninvestable capital to shareholders, which is far preferable to letting it languish,’ she said.
However, she added there was ‘definitely scope’ for the company’s buyback to have been bigger, which may have contributed to the share price slide. The FTSE100 slumped 0.9pc, or 66.41 points, to 7537.37 while the FTSE 250 was down 1.2pc, or 271.35 points, at 21557.59.
The benefit of rising interest rates may bode well for other major UK banks including HSBC (down 1.5pc, or 8.2p, at 540.1p) which will deliver their numbers next week
Fears over war in Ukraine continued to weigh on markets amid reports of clashes in the east of the country and growing doubts about the withdrawal of Russian troops.
Russia-focused steel firm Evraz was the biggest faller in the FTSE 100, tumbling 7.5pc, or 24.7p, to a 19-month low of 305.3p amid worries that sanctions could heavily dent its business if conflict breaks out.
Russian billionaire Roman Abramovich, the owner of Chelsea FC, has seen the value of his 29pc stake in Evraz tumble by £1.3bn this year.
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BATM Advanced Communications edged up after upgrading its full-year forecasts.
The firm, which makes telecoms and cyber-security products, as well as laboratory diagnostic equipment and waste treatment systems, expected its results for 2021 to be ‘slightly ahead’ of market expectations.
The performance was driven by ‘significant growth’ in its diagnostics unit, part of its biomedical business. The shares were up 0.8pc, or 0.4p, to 49.7p.
Airlines also dropped on concerns the conflict could disrupt international travel. British Airways-owner IAG lost 4.1pc, or 7.08p, to 166.3p while Easyjet fell 3.5pc, or 24.8p, to 690p and Wizz Air sank 7.4pc, or 337p, to 4127p.
Oil stocks were in the red as prospects of a deal between the US and Iran sent crude prices below $93 a barrel. The slide caused Shell shares to drop 2.7pc, or 54.1p, to 1969.4p while BP slipped 1.5pc, or 5.85p, to 397.9p. Online fashion firm Boohoo found itself caught up in speculation that it could be a takeover target.
A post on financial blog Betaville noted chatter that the firm could be taken over or subject to a buyout, although the identity of any possible purchaser was unknown. Despite jumping earlier in the session, the shares closed 4.2pc, or 4.16p, lower at 94p.
Investment manager M&G snapped up rival TCF Investment for an undisclosed sum in a move to expand its wealth business. The group also planned to cut TCF’s fees to 0.15pc per year from between 0.25pc and 0.35pc previously. M&G shares were down 1.4pc, or 3p, at 213.4p.
Storage unit provider Safestore added 0.9pc, or 11p, to 1282p after flagging strong trading in its first quarter. Revenues rose 14.6pc to £50.9m as the amount of storage space let out to customers grew 3.7pc to 5.7msqft.
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