Standard Chartered has said it will double investment in its wealth management arm as the bank beat estimates for its third-quarter profit and boosted plans for shareholder returns.
The FTSE 100 lender, which focuses on emerging markets, reported a pretax profit of $1.72bn (£1.3bn) between July and September, topping analysts’ forecasts of $1.49bn (£1.1bn).
Its profit was nearly triple the $633m (£487m) reported during the same period last year when the bank took almost $1bn (£800m) in impairment charges from its exposure to China’s sluggish economy.
Standard Chartered raised key performance targets as it presses on with a plan announced in February to cut $1.5bn (£1.2bn) of costs over three years by simplifying its structure and automating more processes.
The bank said its income would grow by towards 10 per cent in 2024, up from a prior estimate of above seven per cent. It now plans to return at least $8bn to shareholders between 2024 and 2026, up from $5bn.
Despite being headquartered in London, Standard Chartered makes nearly all of its revenue in Asia, the Middle East and Africa. It has hubs in Hong Kong and Singapore.
As part of its revamped strategy, the bank is looking to generate more fee income from wealth management. It announced on Wednesday that it would double investment in its wealth business and spend $1.5bn over five years on relationship managers and investment advisers.
It intends to fund this by scaling back its mass retail business, following in the footsteps of rival HSBC – which in recent years has pulled out of retail markets in the US and France to focus on more profitable areas.
“We are exploring the opportunity to sell all or part of a small number of businesses where the strategic rationale is not sufficiently compelling,” Standard Chartered said. It expects these actions to take place over the next 18 to 24 months.
Standard Chartered’s share price rose 2.6 per cent on Wednesday afternoon in Hong Kong.
Its wealth push paid off in the third quarter as income from wealth solutions jumped 32 per cent year-on-year to $694m. That made it the fastest-growing unit among the bank’s main businesses.
In February, the bank laid out plans to increase its return on tangible equity (RoTE), a key measure of profitability for banks, from 10 per cent to 12 per cent by 2026.
On Wednesday, it raised this 2026 RoTE target to “approaching 13 per cent”.
Standard Chartered’s share price has struggled in recent years, with chief executive Bill Winters calling it “crap” in February. His tenure has seen the bank cut thousands of jobs in a bid to boost investor returns.
However, its turnaround efforts have helped the stock gain 36 per cent this year. It is now trading just three per cent below its level when Winters became CEO in June 2015.
Unlike HSBC on Tuesday, Standard Chartered did not announce a fresh share buyback for the quarter.