Standard Chartered has today announced a new $1.5 billion share buyback after reporting its annual profit rose 18% on the back of record growth in its wealth business and a strong performance of its markets division.
The Asia, Africa and Middle East-focused bank is doubling down on its mainstay wealth management and markets business, even as an uncertain global growth outlook and a divergent interest rate policy are expected to cast a cloud over Western banks in the near term.
“Growth in our footprint markets across Asia, Africa and the Middle East is set to outpace global growth and we are uniquely positioned to take advantage of this,” StanChart CEO Bill Winters said in its earnings statement today.
The London-based lender said its pretax profit for 2024 of $6 billion, up from $5.1 billion the year before and slightly below the $6.2 billion average of analysts’ forecasts as compiled by the bank.
StanChart has said it would invest $1.5 billion 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 in the statement.
The bank has said it was targeting $200 billion of net new money, or assets generated from existing and new clients, from 2025 to 2029, a double-digit compounded annual growth rate in wealth solutions income from 2024 to 2029.
StanChart said it acquired 265,000 new wealthy clients in 2024, who in total brought in $44 billion of new money, which is 61% higher than a year earlier.
It also announced today a final dividend of 28 cents per share.
Michael Makdad, senior market analyst at Morningstar, said the $1.5 billion new share buyback going into the year may be larger than some expectations of an initial buyback of around $1 billion.
StanChart’s results mirrored rival HSBC’s, which earlier this week reported a 6.6% annual increase in pretax profit, slightly ahead of estimates, with wealth and personal banking profit rising 5.2% from a year ago.
Both banks are trying to grow their fee-based income streams such as wealth management, to compensate for declining interest income as central bank rate cuts worldwide eat into the margins lenders make.
StanChart is also, like HSBC, retreating from areas where it lacks scale, particularly in retail banking in many markets where regulatory costs and competition from local players have made it harder for global banks to muscle in.
