Standard Chartered warns on growth as Asia gripped by coronavirus

Standard Chartered has warned it is likely to grow below its target range as coronavirus continues to drag on the Asian economy.

The banking services group said it now expects income growth to be less than its medium-term 5% to 7% target range, because of the outbreak.

It also cited lower interest rates, and weaker economies both globally and in Hong Kong, a vital market, to explain the lower expectations.

At least 2,800 people are thought to have died from the disease around the world, since the outbreak started in earnest earlier this year. The vast majority of these have been in mainland China, but it has also spread to other countries in the region, as well as Europe and the Middle East.

It has added to an already tough 12 months for many businesses operating out of parts of Asia. Standard Chartered also had to deal with a trade war between the US and China, and the political unrest that gripped Hong Kong.

“There were several reminders in 2019 as well as in the first weeks of this year of the importance of the progress we have made improving our resilience to external shocks,” said chairman Jose Vinals.

“I am very proud of how our team in Hong Kong dealt with the social unrest there last year; and am equally proud of how colleagues in that region and globally are pulling together currently to respond to the impact of the coronavirus outbreak.”

The warnings came as Standard Chartered revealed pre-tax profit was up 46% to 3.7 billion US dollars (£2.9 billion) in 2019. Operating income grew 4% to 15.4 billion dollars (£11.9 billion).

On an underlying basis, pre-tax profit was up 8% to 4.2 billion dollars (£3.3 billion), on operating income of 15.3 billion dollars (£11.8 billion).

Chief executive Bill Winters said: “Discipline on the things we control and a sharp focus on where we are differentiated enabled us to grow underlying profit 8% and improve earnings per share by 23% in 2019, despite an increasingly challenging external environment.

“We are in the right markets guided by the right strategy and united through our purpose to drive commerce and prosperity. I am confident that we have set ourselves up for lasting success.”