Unlock the Editor’s Digest for free – Standard Chartered announces $1.5bn share buyback

Standard Chartered, a UK-based bank, has announced its largest ever share buyback of $1.5 billion after reporting strong second-quarter profits. The bank’s pre-tax profits for the quarter reached $1.6 billion, exceeding analysts’ estimates and driven in part by growth in its wealth management business.

The bank’s CEO, Bill Winters, described the results as a “strong set” and expressed confidence in the bank’s performance and capital position. He highlighted the value of the bank’s franchise as a cross-border corporate and investment bank, as well as a leading wealth manager for affluent clients.

Standard Chartered is upgrading its forecast for operating income growth, now expecting a rise of more than 7% in 2024. The bank, which focuses on emerging markets and generates most of its revenue in Asia, has been under pressure to improve shareholder returns and previously pledged billions of dollars in share buybacks and higher dividends.

Winters, who has been leading the bank since 2015, has been working to cut costs and address criticism of the bank being too bureaucratic. The bank’s reported return on tangible equity for the quarter was 10.4%, down slightly from the previous year.

Despite challenges such as exposure to mainland China and credit impairment charges, Standard Chartered’s shares have risen since the beginning of the year. The bank’s Hong Kong-listed shares were trading 4% higher following the earnings news.

The bank has also implemented a cost-cutting plan to save $1.5 billion in expenses over the next three years. Winters has made changes to the bank’s management team, appointing new executives to key positions.

Looking ahead, Standard Chartered is considering potential candidates for its next chair, with UK political figures Sir Charles Roxburgh and Sir Sajid Javid reportedly being considered. The current chair, José Viñals, is nearing the end of a nine-year term limit for independent directors.

Overall, Standard Chartered’s strong performance in the second quarter and strategic initiatives indicate a positive outlook for the bank’s future growth and profitability.