Standard Chartered Posts Lower Quarterly Profit, Announces $1.5 Billion Buyback — 2nd Update

By Kosaku Narioka

Standard Chartered posted a drop in second-quarter net profit and announced a $1.5 billion share buyback.

The London-based bank said Tuesday that net profit fell 3.7% from a year earlier to $946 million for the three months ended June. Its quarterly net profit fell short of the $1.03 billion estimate in a poll of analysts by Visible Alpha.

Second-quarter net interest income--the difference between interest earned on loans and that paid on deposits--slid 19% to $1.60 billion.

Non-net interest income, which includes net fees and commission and net trading gains, rose 18% to $3.06 billion. StanChart, which generates much of its profit in Asia, said underlying profit before tax climbed 14% to $1.83 billion.

The bank upgraded its annual income guidance, projecting operating income growth of above 7% in constant-currency terms, excluding certain one-off items. The bank previously forecast operating income growth near the top of the 5%-7% range, excluding these items.

Standard Chartered Group Chief Executive Bill Winters said the bank will continue to invest in its core capabilities, serving its clients' cross-border needs, with a particular focus on affluent clients.

Second-quarter profit from its corporate and investment banking business declined 2.6% to $1.34 billion, while that from its wealth and retail banking business dropped 5.3% to $646 million.

The bank said it will soon start a $1.5 billion share buyback, its largest ever. The terms of the buyback will be announced, it said.

Shares were recently 5.5% higher on Tuesday in Hong Kong after the second-quarter results. The stock had risen 12% this year through Monday, continuing its gradual upward trend from the low marked in 2020 amid the Covid-19 pandemic.

The bank booked credit impairments of $75 million in the second quarter, smaller than $141 million in the year-earlier period.

Earlier this year, StanChart revamped its group management team in a bid to simplify its organizational structure. The bank has since bolstered its global transaction-banking leadership and added specialists to strengthen the capabilities of its discretionary portfolio-management services and chief investment office.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

July 30, 2024 03:40 ET (07:40 GMT)

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