Standard Chartered PLC on Friday announced a new $1 billion share buyback, as it reported a double-digit profit rise for 2023.
In 2023, the London-based, Asia-focused bank brought in operating income of $18.02 billion, a 10% increase from $16.32 billion a year before. Net interest income increased 2.4% to $7.77 billion from $7.59 billion, while non-NII jumped 17% to $10.25 billion from $8.73 billion.
Its credit impairment fell 39% to $508 million from $836 million, though its goodwill & other impairment jumped to $1.01 billion from $439 million.
Pretax profit increased 19% to $5.09 billion from $4.29 billion, but fell short of company-compiled consensus of $5.12 billion. Net interest margin came in at 1.67% - a touch above consensus expectations of 1.66% - and improved from 1.41% in 2022. Its underlying return on tangible equity improved to 10.1% from 7.7%.
‘We produced strong results in 2023, continuing to demonstrate the value of our franchise and delivering our financial objective of a 10% RoTE for the year. We will now build on this success, taking action to deliver sustainably higher returns with a focus on driving income growth and improving operational leverage and targeting 12% RoTE in 2026,’ said Chief Executive Officer Bill Winters.
In the fourth quarter, operating income increased 16% to $4.37 billion from $3.76 billion. Net interest income fell 7.9% to $1.86 billion from $2.02 billion, while non-NII surged 44% to $2.51 billion from $1.74 billion. Pretax profit improved to $1.14 billion from $123 million.
StanChart proposed a final dividend of $0.21 per share, bringing the full-year total to $0.27 - a 50% increase from the prior year’s 18-cent payout. It also announced plans for a $1 billion share buyback to start ‘imminently’.
Shares in StanChart rose 2.6% to HK$61.80 in Hong Kong during Friday afternoon trade, though the stock remains down 13% over the past 12 months.
Chair Jose Vinals commented: ‘I am acutely aware of the underperformance of our share price in recent months, which I believe does not reflect the progress we are making. Both the board and the management team are absolutely focused on delivering sustained, long-term value for our shareholders. I believe our solid performance in 2023 gives us a good base from which to do this.’
Looking ahead, the firm guided for operating income to increase between 5% and 7% in the period from 2024 to 2026, and around the top of this range in 2024. Net interest income for 2024 is forecast to be between $10 and $10.25 billion at constant currency.
It plans to return ‘at least’ $5 billion to shareholders over 2024 to 2026, with its RoTE to ‘increase steadily’ from 10% towards a 12% target by 2026.
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