STANDARD Chartered vowed to return at least US$8 billion to investors by 2026 as it reported better-than-estimated third-quarter earnings on its wealth business and markets trading.
The London-headquartered bank said adjusted pretax profit rose 37 per cent to US$1.8 billion in the quarter, beating the US$1.5 billion Bloomberg-compiled analyst estimate. It had previously vowed to return at least US$5 billion to shareholders by 2026.
The gain in earnings was “driven by a record quarter in Wealth Solutions and strong growth in our Global Markets business”, chief executive officer Bill Winters said on Wednesday (Oct 30).
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 US 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’s 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.
The shares rose 2.6 per cent to HK$90.45, the highest since February 2018, in early afternoon trading in Hong Kong.
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As part of an effort to trim costs, StanChart said it’s “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, Standard Chartered 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 thousands of US dollars to tens of millions of US dollars. Aimed at capping annual expenses at US$12 billion by 2026, the move is expected to accelerate next year as the bank begins to invest more in efforts to streamline its cost base. BLOOMBERG
