27th Feb 2020 05:23
(Alliance News) - Standard Chartered PLC on Thursday reported double-digit profit growth in 2019, but said it no longer expects to achieve its medium-term target next year amid slowing economic growth.
The London-headquartered banking firm said pretax profit for 2019 increased by 46% to USD3.71 billion from USD2.55 billion reported a year earlier, as operating income grew by 4% to USD15.42 billion from USD14.79 billion.
Market consensus compiled by the company forecast pretax profit at USD3.94 billion on operating income of USD15.38 billion.
Operating costs were reduced, meanwhile, by 6% to USD10.93 billion from USD11.65 billion a year ago.
Standard Chartered declared a final dividend of 20 cents per share, resulting in a full-year dividend of 27 cents per share, up 29% on 2018's payout.
The company's common equity tier 1 ratio stood at 13.8% at the end of the year, up 28 basis points compared the end of the third quarter of 2019. The market had forecast CET1 ratio to come in at 13.6%.
Standard Chartered said its CET 1 capital ratio is back near the top end of its 1% to 14% target range and, therefore, the bank intends to repurchase a further USD500 million worth of shares after buying back USD1 billion in 2019.
The newly proposed share buyback is expected to reduce the CET1 ratio by about 20 basis points, the bank said.
Turning to return on tangible equity, a 6.4% in 2019 was an improvement on 5.1% in 2018, despite "volatile" geopolitics and lower interest rates.
However, Standard Chartered said the "external challenges" are expected to hurt its income growth in 2020, which is now likely to be lower than the 5% to 7% medium-term range previously guided by the bank. Standard Chartered said it will therefore take longer to achieve its 10% RoTE target, which it previously anticipated it would achieve in 2021.
The bank noted that global growth slowed in 2019, growing at about 3.0%, weaker than the 3.8% growth witnessed in 2018. For 2020, the company said it expects global growth to stabilise at 3.0%, the slowest pace of growth since the 2008 - 2009 global financial crisis.
In 2020, Standard Chartered said it intends to continue to invest in "areas of its competitive strength".
"We are in the right markets guided by the right strategy and united through our purpose to drive commerce and prosperity. I am confident that we have set ourselves up for lasting success," said Chief Executive Bill Winters.
By Evelina Grecenko; [email protected]
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