Standard Chartered PLC (HK:2888) (LON:STAN) reported a robust profit for the fiscal year 2023, buoyed by favorable interest rate conditions. The bank also unveiled plans for a $1 billion share buyback program.
Despite the positive performance, Standard Chartered revised its income outlook for 2024 downward. The bank anticipates only modest growth in net interest income, citing concerns about persistent inflationary pressures and geopolitical uncertainties.
In a notable stride, Standard Chartered unveiled a substantial 22% surge in underlying profit before tax for the fiscal year ending December 31, reaching a commendable $5.68 billion, as disclosed in a formal statement to the Hong Kong Stock Exchange. The bank’s underlying net interest income also marked a significant ascent, soaring by 20% to a robust $9.56 billion for the same period.
This remarkable performance was chiefly propelled by an improved net interest margin of 1.67% maintained throughout the year. Capitalizing on this success and aiming to further enhance shareholder value, Standard Chartered initiated a $1 billion share buyback program, set into motion immediately. Despite these optimistic strides, the bank remains cautiously optimistic about its future income trajectory. It anticipates only modest growth in operating income over the ensuing years, with projections ranging between 5% and 7% from 2024 through 2026.
For the upcoming fiscal year of 2024, Standard Chartered foresees net interest income to hover between $10 billion and $10.25 billion. This tempered outlook resonates with similar cautious sentiments echoed by counterparts in the global banking sphere, as credit activity faces challenges stemming from sustained higher interest rates.
Moreover, the bank’s operations in China, a pivotal market, confront hurdles amid a pronounced economic deceleration, notably impacting consumer credit dynamics within the country. Despite these challenges, Standard Chartered continues to navigate the financial landscape with resilience and strategic foresight.