Standard Chartered Embarks On Share Buyback Programme; Profits Rise

Tom Burroughes Group Editor 1 May 2019

Standard Chartered Embarks On Share Buyback Programme; Profits Rise

In an upbeat results announcement yesterday the bank said it will repurchase up to $1.0 billion in shares. Private banking income nudged up in Q1.

UK-listed Standard Chartered has won regulatory blessing to start repurchasing up to a $1.0 billion of shares, as it announced yesterday that underlying pre-tax profit rose by 10 per cent year-on-year to $1.4 billion in the first quarter of 2019.

On a statutory basis, pre-tax profit rose by 5 per cent to $1.2 billion. On a constant currency basis, the figure rose by 7 per cent.

Operating income stood at $3.8 billion, a dip of 2 per cent, but up by 2 per cent on a constant currency basis, the bank, which earns the vast majority of its income outside the UK, said.

Private banking income grew by 3 per cent, and attracted over $1.0 billion of net new money in the first quarter. Wealth management income, however, fell by 14 per cent due to tougher market conditions.

The lender’s common equity tier 1 ratio – a standard measure of a bank’s capital buffer – fell 30 basis points from the end of December last year to 13.9 per cent, before the effect of the proposed share buyback.

Investors cheered the news. Shares in the lender were up by 4.8 per cent in late London trade yesterday.

“Our first quarter profit supports our belief that we will generate full-year returns of at least 10 per cent by 2021. The resolution of our legacy conduct and control issues means we can now manage our capital position more dynamically. We will maintain our strategic investment programme and start to buy back $1 billion of our shares, reflecting our confidence in our ability to execute the strategy and create long-term shareholder value,” Bill Winters, group chief executive, said.

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