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- StanChart’s underlying pre-tax earnings soared to $1.81 billion in Q3
- Like Barclays and Lloyds, StanChart earnings benefited from structural hedging
Standard Chartered raised its annual outlook on Wednesday, joining other big British lenders in reporting profitability that beat forecasts.
The London-listed bank revealed its underlying pre-tax profits soared 37 percent to $1.81 billion in the three months ended September, compared to analyst estimates of $1.6 billion.
Like Barclays and Lloyds, the group’s profits benefited from structural hedging, a strategy banks use to smooth their income amid fluctuating interest rates.
Strong: Standard Chartered revealed its underlying pre-tax profits soared 37 per cent to $1.81 billion in the three months to the end of September.
StanChart credited the reduction of short-term hedges and the repricing of structural hedges for helping to increase its treasury income by $281 million from a year ago.
Total underlying operating income rose by about $500 million to $4.9 billion, its best third-quarter performance since 2015.
Revenue was boosted not only by coverage, but also by record performance in its wealth management division and extraordinary growth in its global markets segment.
Following the result, StanChart now expects operating income to “increase towards” 10 percent this year.
It also intends to deliver at least $8 billion to shareholders between 2024 and 2026, rather than around $5 billion as previously anticipated, and raised its 2026 return on tangible equity target from 12 percent. percent to “closer to 13 percent.”
The FTSE 100 company plans to achieve these goals by doubling investment in its wealth management division to $1.5 billion over five years and attracting wealthier individuals and global institutions as clients.
Additionally, StanChart is considering selling some businesses “when the strategic rationale is not compelling enough.”
Bill Winters, the group’s chief executive, said the measures would “further simplify our business and help us deliver higher quality growth”.
Although headquartered in London, the company derives most of its operating income from Asia, with more than $1.9 billion coming from Hong Kong and Singapore alone during the last quarter.
StanChart’s trading update comes a day after HSBC revealed a $3bn share buyback plan, revealing pre-tax profits of £6.6bn in the third quarter, far exceeding the £5.9bn mark. pounds predicted by analysts.
Last week, Barclays and Lloyds Banking Group published equivalent profit figures of £2.2bn and £1.8bn respectively, with the former’s result being supported by higher investment banking fees.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Long-term questions remain over the expanding footprint and how Standard Chartered delivers continued loan and deposit growth in challenging markets.
“The valuation looks attractive on paper, but some other UK names offer better profitability profiles and growth prospects.”
Standard Authorized Actions They rose 3.5 per cent to 907.4 pence on Wednesday morning and have risen 46 per cent in the last 12 months.
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