Standard Chartered shares jump after boosting annual profit

Standard Chartered shares jumped over four per cent Friday morning after the lender posted its full-year results.

It announced an overhaul on executive pay, as the multinational bank missed analysts’ profit estimates for the final quarter.

Pre-tax profit fell 30 per cent to $800m (£631m) for the fourth quarter. Analysts had estimated the FTSE 100 lender would generate a profit of $983m in the final months of the year.

The lender’s underlying pre-tax profits, adjusted to account for restructuring and additional costs, came in at $1bn, meeting analyst consensus.

The bank’s annual profits grew 18 per cent to $6bn up from the $5bn recorded in 2023. 

A $1.5bn share buyback was announced in the final results, with a proposed final dividend of 28 cents per share.

This brings the bank’s total shareholder distributions to $4.9bn. It has laid out plans to return $8bn to shareholders.

Russ Mould, investment director at AJ Bell, said: “You wouldn’t normally expect a profit miss to get a positive reception but investors have been prepared to look past this at Standard Chartered and concentrate instead on a big increase in the dividend, a bumper buyback and a meaningful improvement in underlying performance.

“Standard Chartered is a very different animal from most of it’s UK-listing banking peers, operating exclusively in much less mature markets in Africa and Asia.”

Mould said it was this style that gave the bank “plenty of growth to go after, something which is particularly evident right now in its Asian wealth management arm”.

Will Howlett, financials analyst at Quilter Cheviot, said: “Standard Chartered’s results for 2024 are somewhat mixed due to several one-off items, including a software write-off, a restructuring charge and a reclassification related to deposit insurance.

“However, we see strength in the key areas.”

He added: “Our positive view on Standard Chartered reflects its strong loan growth potential from its Asian footprint, where GDP growth rates are structurally higher.

“Net interest income is also supported by the ‘higher for longer’ interest rate narrative.

“Profitability has been improving, with the bank targeting a return on tangible equity of 10 per cent this year, increasing steadily to 12 per cent in 2026.”

Overhaul to pay packages

Standard Chartered announced amidst the results it would change chief executive Bill Winters’ pay package by slicing his salary 40 per cent and awarding higher potential bonuses. 

The overhaul on pay could elevate his total pay package to as high as $13.1m for 2025.

However, Winters’ annual salary will be reduced by 40 per cent to $1.5m.

Standard Chartered’s move mirrors the actions of many of Britain’s biggest lenders, such as HSBC, which instigated the changes following the removal of the bonus cap for bankers last year.

Under the new structure, if Winters meets all performance targets his pay could double from the figure paid in 2022.

Employees received a seven per cent boost to 2024 bonuses, bringing the total figure to $1.7bn.

The London-headquartered bank said the removal of the cap on bonuses provided an opportunity to “develop a new approach for executive directors and the applicable wider workforce.”

Commenting on the results, Winters said: “We produced a strong set of results in 2024.

“Our strategy of combining different cross-border capabilities for corporate and institutional clients with leading wealth management expertise for affluent clients is firing on all cylinders, driving an increase in return on tangible equity to 11.7 per cent.”