23rd Feb 2024 05:48
(Alliance News) - Standard Chartered PLC on Friday announced a new USD1 billion share buyback, as it reported a double-digit profit rise for 2023.
In 2023, the London-based, Asia-focused bank brought in operating income of USD18.02 billion, a 10% increase from USD16.32 billion a year before. Net interest income increased 2.4% to USD7.77 billion from USD7.59 billion, while non-NII jumped 17% to USD10.25 billion from USD8.73 billion.
Its credit impairment fell 39% to USD508 million from USD836 million, though its goodwill & other impairment jumped to USD1.01 billion from USD439 million.
Pretax profit increased 19% to USD5.09 billion from USD4.29 billion, but fell short of company-compiled consensus of USD5.12 billion. Net interest margin came in at 1.67% - a touch above consensus expectations of 1.66% - and improved from 1.41% in 2022. Its underlying return on tangible equity improved to 10.1% from 7.7%.
"We produced strong results in 2023, continuing to demonstrate the value of our franchise and delivering our financial objective of a 10% RoTE for the year. We will now build on this success, taking action to deliver sustainably higher returns with a focus on driving income growth and improving operational leverage and targeting 12% RoTE in 2026," said Chief Executive Officer Bill Winters.
In the fourth quarter, operating income increased 16% to USD4.37 billion from USD3.76 billion. Net interest income fell 7.9% to USD1.86 billion from USD2.02 billion, while non-NII surged 44% to USD2.51 billion from USD1.74 billion. Pretax profit improved to USD1.14 billion from USD123 million.
StanChart proposed a final dividend of USD0.21 per share, bringing the full-year total to USD0.27 - a 50% increase from the prior year's 18-cent payout. It also announced plans for a USD1 billion share buyback to start "imminently".
Shares in StanChart rose 2.6% to HKD61.80 in Hong Kong during Friday afternoon trade, though the stock remains down 13% over the past 12 months.
Chair Jose Vinals commented: "I am acutely aware of the underperformance of our share price in recent months, which I believe does not reflect the progress we are making. Both the board and the management team are absolutely focused on delivering sustained, long-term value for our shareholders. I believe our solid performance in 2023 gives us a good base from which to do this."
Looking ahead, the firm guided for operating income to increase between 5% and 7% in the period from 2024 to 2026, and around the top of this range in 2024. Net interest income for 2024 is forecast to be between USD10 and USD10.25 billion at constant currency.
It plans to return "at least" USD5 billion to shareholders over 2024 to 2026, with its RoTE to "increase steadily" from 10% towards a 12% target by 2026.
By Elizabeth Winter, Alliance News deputy news editor
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