(Oct 30): Standard Chartered plc lifted its outlook for both income and returns after it reported third-quarter profit that beat analyst estimates.
Adjusted pre-tax profit rose to US$1.99 billion, beating the US$1.79 billion average of analysts’ estimate compiled by Bloomberg. The performance was largely a result of the bank’s wealth management unit and global banking.
“We can now say that we are going to reach the return on tangible equity target that we had set for ourselves for 2026 a full year in advance,” chief financial officer Diego de Giorgi said in an interview with Bloomberg Television. It was, he said “a strong quarter of progress towards our objectives”.
Like its larger rival HSBC Holdings plc, Standard Chartered is in the midst of its own restructuring programme known as ‘Fit for Growth’ that involves several hundred initiatives across the bank aimed at saving everything from a few hundred thousand to tens of millions of dollars.
The programme is now in the second of its three-year delivery phase, with much of the savings expected to come this year and next. The bank reported a US$138 million charge related to the programme in the quarter.
StanChart shares had risen 3.1% at 8.06am in London on Thursday. That brought its advance for the year to 53%, far outpacing the 19% advance of the FTSE 100 Index.
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The results came amid a watershed moment for the global economy as US President Donald Trump and Chinese President Xi Jinping wrapped up their highly-anticipated summit on Thursday. Trump said it was an “amazing meeting” and it resulted in a détente that would see the US halve fentanyl-related tariffs on Chinese goods as Beijing pauses sweeping controls on rare-earth magnets.
“Anything that reduces policy uncertainty around the world is to be welcomed because it improves business confidence and it improves investors’ confidence in general,” de Giorgi said in a separate conference call with journalists. “And that clearly benefits us like it benefits the rest of the world.”
The lender said income growth for 2025 is now expected to be towards “the upper end” of the 5% to 7% range after previously guiding to around the bottom of that range. It also upgraded its guidance for the return of tangible equity to be “around 13%” in 2025 from approaching 13% in 2026.
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Income from global banking, including lending and capital markets, rose 24% to US$588 million, while wealth solutions had a record quarter with income jumping 28%.
Like many banks in Hong Kong, Standard Chartered is riding a boom in the wealth business as the lender is in the process of bolstering its wealth management arm.
A year ago, the bank said it was doubling its planned investment in serving affluent clients to US$1.5 billion over the next five years. The aim is to bring in US$200 billion of net new money into the bank between 2025 and 2029 and boost the share of its wealth and retail banking division’s income to three-quarters of the total.
Net inflows were US$13 billion in the quarter, with 67,000 new wealthy clients.
Amid a spotlight on private credit, with recent failures of subprime auto lender Tricolor and auto-parts supplier First Brands, Standard Chartered said its private credit exposures are below US$3 billion, less than 0.5% of the group’s total. The exposure is linked to providers of non-bank lending to corporates and regular portfolio reviews show “no material issues”, the company said.
Credit impairments rose to US$195 million in the quarter, up from US$178 million a year earlier.
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