Selena Li and Scott Murdoch

HONG KONG/SYDNEY (Reuters) - The charter said uncertainty caused by the impact of trade tariffs promoted activity for its clients in the first quarter, but warned that large deals could be put on hold if trade tensions persist.

The bank’s cautious stance provides more evidence on how U.S. President Donald Trump’s tariffs weigh long-term deals and hit lenders’ revenues after customers rushed to hedge risks in the busy first quarter.

Stanchart reported on Friday that profits in the first quarter were up 10% as analysts predicted revenues as outstanding performance in its wealth, markets and global banking promoted, while net interest income fell from the previous quarter on a constant currency basis.

"(In the second quarter, momentum (in the second quarter) continued until the high volatility the market experienced," Diego de Giorgi, the bank's chief financial officer, told reporters.

Clients have been particularly active with “tactical” moves so far, he said, using the bank’s “liquidity business” to manage their exposure to currencies, commodities or interest rates.

"Obviously, we are still paying attention to the long term...execution of more strategic transactions in banking, which may be delayed if uncertainty remains higher," the chief financial officer said.

Stanchart's Hong Kong-listed stock rose as much as 4.2% after the result to a five-week high, with stocks that continued 0.7% up 4.2% and stocks up 4.2%. The benchmark suspension rose 1.7%.

In 0915, its London-listed stock fell 0.8%.

The bank suffered a $219 million credit barrier in the quarter, up 24% from the same period last year. The bank has set aside $23 million, which is related to the increased uncertainty over trade tariffs.

Other major banks highlighted the threat of trade tensions to economic growth and credit quality. HSBC reported results earlier this week, predicting that lending demand and credit quality will increase after trade tensions are intensifying.

Wealth business

Stanchart, which focuses on Asia, Africa and the Middle East, reported a first-quarter pre-tax profit of $2.1 billion, compared with $1.91 billion a year ago, analysts' forecast of $1.91 billion.

Jefferies analysts said in a research note that the results showed that the bank had “significant strength” in its wealth business.

"We still believe that the current tariff uncertainty is ultimately a growth issue, not a credit," they said.