StanChart plans at least $10.6 billion return to investors as Q3 profit more than doubles
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Standard Chartered vowed to return at least US$8 billion (S$10.6 billion) to investors by 2026, up from US$5 billion.
PHOTO: REUTERS
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LONDON - Standard Chartered vowed to return at least US$8 billion (S$10.6 billion) to investors by 2026 as its quarterly profit more than doubled from a year ago despite falling global interest rates.
The bank had previously vowed to return at least US$5 billion by 2026.
StanChart, which earns most of its revenue in Asia, said pre-tax profit for the third quarter of 2024 reached US$1.72 billion, above the US$1.49 billion average of 17 analyst estimates compiled by the bank.
The profit compared with US$633 million a year earlier, when StanChart took a nearly US$1 billion combined hit from its exposure to China’s real estate and banking sectors.
Rival HSBC reported a 10 per cent quarterly year-on-year profit increase on Oct 29, sending its shares to a high of at least six years as investors turned bullish on its outlook.
“We have delivered a strong performance in the third quarter with profit before tax up 41 per cent, driven by a record quarter in wealth solutions and strong growth in our global markets business,” StanChart chief executive Bill Winters said in a statement.
Helping the bank have been strong performances by several of its core businesses, such as wealth management, which has been boosted by net inflows of billions of dollars of new money, as well as financial markets and global banking.
The lender said it was upgrading its 2024 operating income guidance to grow towards 10 per cent, from above 7 per cent. It is also doubling its investment in wealth management to invest about US$1.5 billion over the next five years in relationship managers and investment advisers, and digital capabilities.
StanChart shares rose 2.6 per cent to HK$90.45, the highest since February 2018, in early afternoon trading in Hong Kong.
As part of an effort to trim costs, StanChart said it is “exploring the opportunity to sell all or part of a small number of businesses where the strategic rationale is not sufficiently compelling” and expects these actions to take effect over the next 18 to 24 months.
This would enable it to focus its resources on the cross-border needs of its corporate and investment banking as well as wealth and retail banking clients.
Lending demand is starting to creep back up, and chief financial officer Diego De Giorgi said at a recent Bank of America financial services conference that the lender could see “green shoots of demand”, though growth remained below the level he expected to see given the countries the company operates in.
Like other major banks attempting to cope with the impact of falling rates, StanChart is in the midst of a cost-savings programme. Known as Fit for Growth, it aims to save US$1.5 billion through more than 200 internal initiatives targeted at reducing expenses by as little as a few hundred thousand dollars to tens of millions of dollars.
Aimed at capping annual expenses at US$12 billion by 2026, the move is expected to accelerate in 2025 as the bank begins to invest more in efforts to streamline its cost base. BLOOMBERG, REUTERS
