Standard Chartered Stock Up On Q4 Profit, Dividend Hike, $1 Bln Buyback

(RTTNews) - Shares of Standard Chartered Plc were gaining around 8 percent on London Stock Exchange after the British lending major on Friday reported significantly higher pre-tax profit in its fourth quarter, while it turned around to a profit on an after-tax basis. The results reflected higher operating income, even as net interest income was weak.

Looking ahead, the company projects higher net interest income in 2024 and years ahead. The Board is further proposing 50 percent higher dividend, and announced up to $1 billion share buyback.

Bill Winters, Group Chief Executive, said, "We produced strong results in 2023.... We will now build on this success, taking action to deliver sustainably higher returns with a focus on driving income growth and improving operational leverage and targeting 12 percent RoTE in 2026."

For fiscal 2024, net interest income is projected to be in the range of $10 billion to $10.25 billion at constant currency. Operating income would increase around the top of 5-7 percent range.

In fiscal 2023, net interest income was $7.77 billion, and operating income was $18.02 billion.

For 2024-2026, the company expects operating income to increase 5 percent to 7 percent.

Further, Standard Chartered said it targets to return at least $5 billion over the next three years.

The Board has recommended a final dividend of 21 cents per share, resulting in a total 2023 ordinary dividend of 27 cents per share, a 50 percent increase from last year. Record date for the dividend is March 8, and payment date is May 17.

The Board also announced a share buyback of up to $1 billion, which is expected to start shortly. It would reduce the firm's CET1 ratio in the first quarter of 2024 by approximately 40 basis points.

In its fourth quarter, Standard Chartered's earnings before taxation stood at $1.14 billion, significantly higher than $123 million a year ago.

On an after-tax basis, the bank registered a net profit of $938 million or 33.3 cents per share, compared to a loss of $264 million or 9.9 cents per share last year.

On an underlying basis, profit before taxation was $1.06 billion, compared to $648 million a year ago. Underlying earnings per share moved up to 29.7 cents from 7.5 cents in 2022.

Operating income for the quarter grew 7 percent to $4.37 billion from prior year's $3.764 billion.

Net interest income was down 8 percent year-over-year at $1.86 billion, while non net-interest income climbed 44 percent to $2.51 billion.

On an underlying basis, operating income grew 7 percent to $4.02 billion, with 6 percent rise in net interest income to $2.39 billion, and 8 percent increase in non net-interest income to $1.63 billion.

In London, Standard Chartered shares were trading at 652 pence, up 7.7 percent. In Hong Kong, the shares closed today's trading at HK$62.45, up 3.65 percent.

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