Standard Chartered lifts income target as 1H profit beats estimates

Standard Chartered reported 1H profit before tax of USD4.78 billion, up 9% from a year earlier and beating analyst estimates.

"The results reflect strong wealth momentum across our markets," Benjamin Hung, President, International at Standard Chartered, said.

The bank declared an interim dividend of 20.4 cents per share, up from the prior year. It completed USD1 billion in share buybacks during the first half and has returned about USD10.3 billion to shareholders over the past three years, including USD3 billion in dividends and USD7.4 billion in buybacks. Hung said the bank still has room for additional buybacks and that the mix of dividends and buybacks will become more balanced going forward, with a potential increase in the payout ratio in the second half.

Nearly half of the first-half loan impairment charges came from Middle East-related provisions, Hung said. He described the Middle East situation as uncertain but said the bank has made sufficient provisions. He expects the Federal Reserve to keep interest rates unchanged over the next two quarters.

Judy Hsu, CEO of Wealth and Retail Banking at Standard Chartered, said China's new regulations on outbound investment are aimed at clarifying rules and cracking down on unofficial channels, not restricting capital inflows into Hong Kong or other regions. The group's net new money inflows remained strong in both the first half and the second quarter, and Hsu said she does not expect the measures to affect client growth or net new money inflows.

Shares of Standard Chartered rose 3.86% on the day. Goldman Sachs raised its price target on the stock to HKD276, citing the second-quarter earnings beat and improved full-year guidance.

The guidance raise signals management expects wealth and banking momentum to sustain. Investors will watch the second-half earnings for updates on the dividend payout ratio and buyback program.

This article is for informational purposes only and does not constitute investment advice.