Standard Chartered reported an underlying pretax profit of $994 million in the six months to end-June, as cost-cutting, steady income and fewer bad loans helped the bank return to the black after a billion dollar loss in the second half of 2015. The first-half profits at the Asia-focused lender reflected a 13 percent fall in operating costs to $4 billion and stable income of $6.8 billion, despite an uncertain economic outlook, and suggested a sweeping restructuring under chief executive Bill Winters had begun to bear fruit.

“The external environment and outlook is more difficult but we are strengthening our bank, becoming more efficient and investing in our future,” Winters said in a statement.

Shares in the bank were trading 5 per cent higher at 622 pence by 1000 GMT as investors cheered the addition of more than 40,000 new retail banking clients and the bank’s continued progress on exiting low-returning or non-core businesses. The bank said its core capital ratio - a key measure of financial strength - remained flat at 13.1 per cent.

In the year since he joined the bank, former JPMorgan investment banker Winters has announced plans to axe more than 15,000 jobs, overhauled senior management, closed the bank's stock trading business and raised $5.1 billion in capital as part of a plan to restore profitability. But despite the positive progress report on its overhaul, which saw risk-weighted assets drop by a further $13 billion, Standard Chartered said it expected 2016 performance to remain subdued as global economic prospects wilted. Echoing a similar statement by HSBC earlier on Wednesday, the bank said it would also defer its goal to reach a tangible return on equity of 8 percent by 2018, citing slowing global growth and lower interest rates.

While StanChart has less exposure to the British economy than other major London-based lenders, the bank is suffering from slowing growth in Asia where it makes more than two thirds of its profits. It reported a fall in underlying loan impairments of $1.1 billion and said it continued to be “watchful” for potential spikes in troubled loans as stresses among key corporate borrowers remained. The bank last week named former deputy governor of the Bank of Spain Jose Vinals as its new chairman, ending a 16-month search.

Reuters