Standard Chartered has announced a $1.5bn share buyback programme today after the Asia-focused bank performed ahead of expectations in the second quarter of the year.
Underlying pretax profit climbed to $1.8bn in the three months to June, up from 15 per cent on last year and slightly ahead of company compiled consensus.
The stronger than expected performance was largely due to a good performance from its wealth management business. Revenue from wealth management rose 27 per cent on last year with the bank pointing to “broad-based growth across products” and robust leading indicators in new sales.
Underlying net interest income, the difference between what banks pay out and receive in interest, climbed six per cent year-on-year to $2.6bn.
“We produced a strong set of results for the first half of the year, demonstrating the value of our franchise as a cross-border corporate and investment bank and a leading wealth manager for affluent clients,” Bill Winters, chief executive said.
On the back of its results, the bank upgraded its guidance and now expects operating income to be seven per ahead of last year, up from a previous estimate of 5-7 per cent. Net interest income for the year will be around £10bn.
The share buyback announced today, the bank’s largest ever, is the second this year after Standard Chartered announced a $1bn buyback alongside its 2023 results in February. It aims to return at least $5bn to shareholders over the next three years.
Its shares are up over 10 per cent this year, but has slumped nearly a third during Winters’ tenure. The boss lamented the bank’s “crap” share price when it published its 2023 results in February.
Despite its headquarters and primary stock listing being in London, Standard Chartered makes nearly all of its revenue in Asia, the Middle East and Africa, with hubs in Hong Kong and Singapore.
Some analysts have criticised the bank for spreading itself too thin over too many markets. Last year, the bank was hit by losses tied to China’s commercial real estate crisis and exited markets in sub-Saharan Africa and Jordan as part of efforts to streamline its global operations.