Key Takeaways
Standard Chartered Plc’s Hong Kong-listed shares rose nearly 5 percent after the bank reported first-quarter pre-tax profit that was 25 percent above market expectations, fueled by strong growth in its wealth management division.
Jefferies reiterated its "Buy" rating on the stock following the results, maintaining a price target of 2,250 pence. The broker noted that the bank's wealth business was 13 percent above its own forecasts.
The emerging markets-focused lender saw revenue grow 9 percent on a constant currency basis, 6 percent ahead of consensus forecasts. This was driven by a 32 percent year-over-year jump in wealth management income. Net interest income was 3 percent above estimates, while the bank's return on tangible equity reached 17 percent for the quarter.
The strong performance provides early validation for the bank's strategy, with shares (02888.HK) closing up 4.97 percent in Hong Kong. The bank maintained its 2026 guidance, including a target for return on tangible equity to exceed 12 percent.
Standard Chartered's balance sheet remained solid, with client deposits ending the quarter $3 billion above expectations and loans finishing $3.5 billion higher. The Common Equity Tier 1 (CET1) ratio, a key measure of financial strength, stood at 13.4 percent, slightly below Jefferies' forecast due to higher loan growth driving up risk-weighted assets.
The bank did take a $190 million credit provision related to Middle East risk. However, overall costs rose only 1 percent, demonstrating solid operating leverage against the 9 percent revenue growth. The company did not disclose its earnings per share or any dividend declaration in the preliminary report.
The results signal that Standard Chartered's focus on wealth management is yielding significant returns, helping to offset concerns about regional risks. Investors will now watch to see if the bank can maintain this momentum and achieve its full-year guidance of 5 to 7 percent revenue growth.
This article is for informational purposes only and does not constitute investment advice.
