Standard Chartered Unveils New Buyback, Guides for Growth — Update

By Sherry Qin and Ben Otto

Standard Chartered PLC unveiled a $1 billion buyback and forecast higher income this year, after it posted a quarterly earnings beat on the back of topline growth, lower impairments and the sale of its aviation finance business.

The London-based lender, which earns most of its revenue in Asia, on Friday said underlying pretax profit in the fourth quarter rose 63% compared with the same period a year earlier to $1.06 billion, beating a consensus of $957 million, according to estimates compiled by the company. Reported pretax profit rose more than nine-fold to $1.14 billion.

Underlying operating income rose 7% on year to $4.02 billion, helped by gains in both net interest income and non-interest income. Underlying net interest income rose 6% on year to $2.39 billion, slightly lower than an estimate for $2.42 billion.

The bottomline was helped by sharply lower impairments and a gain from the sale of the bank's global aviation finance leasing business, which closed in November. Credit impairments fell to $62 million from $340 million a year ago, partly due to reduced charges related to China's commercial real estate and sovereign risks.

"We have continued to seize the China opportunity, with our China-related business performing well, despite post-Covid domestic recovery tracking below expectations," Group Chief Executive Bill Winters said. He added that the bank's goal of doubling the pre-tax operating profit of its onshore and offshore China business by the end of 2024 was almost achieved in 2023.

"Looking forward, we continue to be confident in the long-term opportunities that China re-opening will generate," he said.

The lender said it would buy back up to $1 billion in shares starting immediately, which it said it expected to reduce its CET1 ratio by about 40 basis points. It also guided for net interest income of $10 billion to $10.25 billion on a constant currency basis this year, and said it expects operating income to rise 5%-7% for 2024-2026.

Standard Chartered added that it plans to return at least $5 billion to shareholders cumulatively from 2024 to 2026.

Write to Sherry Qin at sherry.qin@wsj.com and Ben Otto at ben.otto@wsj.com

(END) Dow Jones Newswires

February 23, 2024 01:07 ET (06:07 GMT)

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