StanChart in $1.5bn buyback as annual earnings rise

(Sharecast News) - Asia-focused bank Standard Chartered said it would hand back $1.5bn to shareholders after a rise in annual earnings driven by its pursuit of wealthy customers, although it warned that global growth could be hit by protectionist trade policies amid threats of widespread tariffs by the new US government. Pre-tax profits for 2024 came in at $6bn, up from $5.1bn a year earlier and slightly below average estimates of $6.2bn. Unlike other banks reporting this week, StanChart also managed to lift its net interest margin - the difference between savings and lending rates - by 27 basis points to 1.94%.

Operating income rose 14% to $19.7bn boosted by a record performance in the wealth division, which grew 29%, and strong double-digit growth in global markets and global banking.

The bank said it attracted 265,000 new affluent clients, bringing in $44bn of net new money, up 61% year-on-year.

StanChart expects global growth to be broadly flat in 2025, moderating slightly to 3.1% from 3.2% last year, but then accelerating in 2026 to 3.3%. Its Asia, Africa and Middle East markets were expected to outpace the rest of the world.

"Support from looser financial conditions and expansionary fiscal policy may be partly offset by protectionist trade policies and interest rates that remain high," the bank said, adding that its own 2025 income growth was expected to be below the 5 - 7% range excluding notable items.

"We produced a strong set of results in 2024. Our strategy of combining differentiated cross-border capabilities for corporate and institutional clients with leading wealth management expertise for affluent clients is firing on all cylinders, driving an increase in return on tangible equity to 11.7%," said chief executive Bill Winters.

StanChart is investing $1.5bn over five years in wealth and digital platforms, client centres, people and brand and marketing, to accelerate income growth and returns.

"We are confident that our increased investment and greater concentration will help us to outperform the market in terms of asset gathering and income growth over the medium term," Winters said.

Interactive Investor head of markets Richard Hunter said: "Despite the headwinds of its exposure to China and the real estate sector in particular, where its presence has been something of a double-edged sword, the group's general exposure to Asia has offset any immediate concerns."

"After some years in the doldrums having once been the darling of the UK banking sector, Standard finds itself in something of a revival. Prior to this update, the shares had risen by 90% over the last year, as compared to a rise of 13% for the wider FTSE 100. This was driven only in part by a previously rebuffed takeover from First Abu Dhabi Bank, but rather more on prospects particularly throughout emerging markets."

"With such a stellar price run, the shares do not look obviously cheap and Standard will need to deliver on its projections for the next leg of growth. Even so, the strength of this update could well prompt an upgrade to a market consensus which currently stands at a hold, albeit a strong one."

Reporting by Frank Prenesti for Sharecast.com