Standard Chartered Announces USD 1B Share Buyback

Standard Chartered raised its performance targets, announced a new $1 billion share buyback, and increased its annual profit by 28% as global interest rate rises boosted lending revenues.

StanChart reported that interest accounted for nearly half of its 10% overall income growth, as central bank rate hikes aimed at combating inflation allowed banks to charge borrowers more after a decade of near-zero rates.

Standard Chartered raised its performance targets, announced a new $1 billion share buyback, and increased its annual profit by 28% as global interest rate rises boosted lending revenues.

StanChart reported that interest accounted for nearly half of its 10% overall income growth, as central bank rate hikes aimed at combating inflation allowed banks to charge borrowers more after a decade of near-zero rates.

StanChart, which makes the majority of its money in Asia, reported a statutory pretax profit of $4.3 billion for 2022, which was less than the $4.73 billion average of analyst forecasts compiled by the bank but was its highest annual return since 2013.

However, the bank reported a string of setbacks in its key market of China, where strict COVID-19 regulations have strangled the economy.

It recorded a $582 million impairment for expected bad debts in the country's troubled real estate market, bringing its overall impairment to $838 million, which was higher than expected.

StanChart also took a $308 million hit which it attributed to "industry challenges" on its investment in China Bohai Bank, a lender based in the northern coastal city of Tianjin.

The COVID-19 restrictions, which China is now beginning to lift, also limited face-to-face sales of wealth management products, contributing to a 17% drop in unit income as customers became more risk averse.

One of the highlights of the bank's overall results was StanChart's financial markets business, which reported record income up 21% as volatile markets drove frenzied trading activity.