tl;dr
Standard Chartered is investing $1.3 billion in a share buyback following quarterly profits that exceeded analyst expectations. The bank plans to return at least $8 billion to shareholders between 2024 and 2026, with this buyback being its second significant repurchase within six months. The bank re...
Standard Chartered is investing $1.3 billion to repurchase its own shares after reporting quarterly profits that exceeded analyst expectations. The London-based bank announced this buyback as part of a broader plan to return at least $8 billion to shareholders between 2024 and 2026. Earlier this year, in February, the bank had already initiated a $1.5 billion stock buyback, marking this as the second significant repurchase within six months.
The bank’s second-quarter results revealed an adjusted pretax profit of $2.4 billion for the three months ending June 30, surpassing the $1.9 billion forecasted by analysts. Standard Chartered’s share price in London reached approximately £13.70 by Thursday, marking a gain of over 30% this year, despite setbacks earlier amid new global tariffs announced by U.S. President Donald Trump.
Adding to the strong financials, the bank’s wealth division attracted a record $16 billion in new client assets during the quarter. This surge contributed to a 44% increase in pre-tax profits compared to the same period last year. The bank posted total quarterly profit of $2.3 billion, exceeding the $1.6 billion earned the previous year and analysts’ prediction of $1.7 billion. Additionally, the return on tangible equity—a key profitability metric—jumped to 17.9%, well above expectations of 11.7% and an improvement from 10.4% one year ago.
Standard Chartered remains deeply engaged in a $1.5 billion cost-cutting initiative titled “Fit for Growth.” This program aims to streamline operations by eliminating unnecessary expenses and divesting underperforming segments. Cost-saving measures vary from relatively minor adjustments to major restructuring efforts involving tens of millions of dollars. About half the targeted reductions are expected to materialize this year, with further expenses anticipated as the bank continues to downsize non-core operations, scale back infrastructure, and reduce property costs.
CEO Bill Winters, celebrating his 10-year leadership milestone last month, has been instrumental in steering these changes. His tenure has involved multiple reorganizations, job cuts, and efforts to mitigate risk while refocusing the bank’s core strategy. Under his guidance, the bank concentrates on markets in Asia, Africa, and the Middle East, leveraging its extensive presence in these regions.
Bill Winters emphasized in the earnings report, "We’re performing well, while keeping a tight grip on costs, credit risk and capital. Our strong first-half performance reflects continued successful execution of our strategy, through our focus on cross-border and affluent banking." He further stated, "Through our unique network across Asia, Africa and the Middle East, we offer our clients the means to navigate volatile external conditions."
Amid rising political risks and the ongoing impacts of the U.S.-China trade tensions, Standard Chartered is pursuing a dual strategy of aggressive cost reduction and shareholder returns through buybacks. This approach reflects confidence in its operational plan as uncertainties continue to affect the global banking landscape.