Standard Chartered to return billions to investors but chief bemoans lagging share price

Standard Chartered joined the ranks of lenders that have reported bumper earnings today. The bank reported statutory pre-tax profits for the final three months of 2023 of $1.1bn (£0.9bn) and $5.1bn (£4bn) for the full year, up 19 per cent.

The emerging markets-focused bank’s return on tangible equity, a key measure of profitability, was 10.1 per cent for 2023, up from 8.1 per cent a year earlier and beating analysts’ expectations of 9.5 per cent. Management said it wanted to take the return on tangible equity to 12 per cent by 2026.

Net interest income rose 6 per cent to $2.4bn (£1.9bn) for the fourth quarter and the lender said it expected this figure to expand further in 2024.

Standard Chartered announced another $1bn (£0.8bn) share buyback alongside the results and said it aims to return at least $5bn (£3.9bn) to shareholders over the next three years.

Chief executive Bill Winters said: “We are in a privileged position to take advantage of significant growth opportunities that will continue to come from the markets in our footprint, generating value for our clients and the communities in which we operate.”

He added: “Whilst we expect global growth to stay below potential at 2.9 per cent in 2024, as high-interest rates put a drag on consumers as well as investment spending, Asia is likely to be the fastest-growing region continuing to drive global growth, expanding by 4.9 per cent.”

However, despite the chief’s overall optimistic tone, Winters added that sustained inflationary pressures as well as a “sluggish housing market in China and increased geopolitical tensions,” could throw up challenges.

The chief continued: “Our share price reflects little of our optimism about prospects and seems heavily influenced by the downside concerns mentioned above. The concerns are real, and we take them seriously.

“We maintain a strong capital position and liquidity to absorb any adverse impact on us and our clients. We believe that the value of our franchise will become increasingly clear to the broader market as we continue to grow our profits and exceed market expectations in those very areas of most concern.”