Standard Chartered lifts guidance and launches record $1.5 billion share buyback

By Louis Goss

Standard Chartered on Tuesday vowed to launch its largest share buyback ever after beating analysts' forecasts in posting a sharp increase in its second-quarter profits driven by a bumper performance from its wealth management division.

The London headquartered bank, which makes bulk of its income in Asia and Africa, posted a 11% increase in its operating income to $1.96 billion on the back of a 27% surge in income from its wealth management division to $618 million.

In a call with investors, the bank's CEO Bill Winters said the growth of Standard Chartered's wealth management arm had been driven by the growing importance of Hong Kong as an increasingly important "offshore financial center for China."

Standard Chartered, in turn, vowed to buy back a record $1.5 billion worth of its shareholders as it also upped its dividend by 50%, to 9c per share. The lender also lifted its income guidance in predicting it will achieve growth of more than 7% in 2024, versus its previous 5-7% outlook.

Shares in Standard Chartered (UK:STAN) (HK:2888) (SCBFY), listed on the London Stock Exchange, increased 6% on Tuesday having gained 17% in the year-to-date.

Standard Chartered's CEO Bill Winters said the lifted guidance reflects the bank's "confidence in our performance and robust capital position" as the lender said it expects its Asian business will continue to drive up its profits.

In the second quarter, the FTSE-100 banking giant saw its income buoyed by a record performance from its wealth management arm driven by a doubling of its sales to $13 billion that contributed to a sharp 13% increase in its assets under management to $135 billion.

The bank said that it has brought in $23 billion worth of new money into its wealth management division in 2024 so far in line with plans to draw in $80 billion worth of new investment over the next three years.

In a call with investors, Winters said investment going into China's sustainability projects and Belt and Road initiative had also boosted its corporate and investment banking business more broadly as he said those flows are now increasingly going through Hong Kong.

Looking ahead, Standard Chartered flagged risks surrounding the ongoing "shift towards a multipolar global system" that has led to "more transactional and less predictable interactions between global power."

The bank also pointed to risks surrounding the malicious use of artificial intelligence technologies, the potential for a new U.S.-China trade war, and the worsening political situation in the Democratic Republic of Congo.

Standard Chartered said it has now successfully cut its exposure to China's troubled commercial real estate market by 46% since December 2021 when the crisis in the sector was sparked by the collapse of industry giant Evergrande.

-Louis Goss

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07-30-24 0940ET

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