Santander gets a first-quarter profit boost, while Standard Chartered disappoints with an earnings slump. Sara Hemrajani reports on the differing fortunes of the two banking giants.
It's a tale of differing fortunes for two of the world's biggest banks. Santander soars, while Standard Chartered stumbles. Buoyed by improved earnings in Britain and Latin America, Santander has posted a 32 percent rise in first-quarter profit. The euro zone's top lender is making a major push to win over international clients and shift away from a reliance on acquisitions. And despite concerns about Brazil's cooling economy, Santander seems to be maintaining investor confidence. BGC market analyst Mike Ingram. SOUNDBITE: BGC market analyst, Mike Ingram, saying (English): "Bearing in mind that the Brazilian economy remains in the doldrums, I suppose people might be thinking well that performance isn't going to be repeated. But looking overall, certainly outside of Brazil, Spain looking very strong, decent growth also in the US and UK businesses." Like Santander, Standard Chartered makes most of its cash outside of its home market. In the past, the British bank's focus on Asia shielded it from the worst of the financial crisis. But now the region, as well as falling commodity prices, are hitting Standard Chartered's bottom line. Quarterly pre-tax profit has dropped 22 percent. Analysts are keeping an eye on the bank's cost-cutting plan and CEO change this summer. SOUNDBITE: BGC market analyst, Mike Ingram, saying (English): "Questions remain over the capital strength of the bank. They need to build equity through asset disposals, through de-risking the balance sheet and also by cutting costs. If they can't do that, then of course the question mark over a possible capital increase ahead of what is going to be a more stringent Bank of England stress test this year are going to weigh heavily on the share price." Standard Chartered's shares have slumped more than 10 percent in the past year.