StanChart launches new $1b buyback, lifts targets

Standard Chartered raised its performance goals, unveiled a new $1 billion share buyback and produced a 28 per cent rise in annual profit as global interest rate rises bolstered its lending revenues.

StanChart said almost half its 10 per cent overall income growth came from interest, as central bank rate hikes aimed at combating inflation enabled banks to charge borrowers more after a decade of near-zero rates.

The Asia, Africa and Middle East-focused bank, which has been the subject of takeover speculation linked with First Abu Dhabi Bank (FAB), said its latest share buyback would start imminently.

Its shares rose 3.5 per cent in Hong Kong after the announcements, while its London-listed stock opened 2 per cent higher.

“We are upgrading our expectations, and are now targeting a return on tangible equity approaching 10 per cent in 2023, to exceed 11 per cent in 2024, and to continue to grow thereafter,” Chief Executive Bill Winters said in a statement.

London-headquartered StanChart previously targeted 10 per cent for 2024. Return on equity is a key profitability metric for banks.

StanChart’s shares have been energised this year by renewed takeover speculation but Winters told reporters the bank had “had no engagement nor solicited any engagement from anyone and was “happy to be accomplishing targets” on its own.

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