Standard Chartered Shares Jump After Announcing Largest Ever Share Buyback

Standard Chartered (LON: STAN) has reported a stellar performance for the first half of 2024, sending its share price more than 5% higher in Tuesday's session.

The bank announced a 21% surge in underlying profit before tax to $4 billion, fueled by robust growth in its wealth management and global banking divisions. In Q2, the company's underlying profit before tax came in at $1.8 billion, up 15% .

To underscore its confidence in future prospects, the bank unveiled its largest-ever share buyback of $1.5 billion. This aggressive capital return move follows a previous buyback of $1 billion announced earlier in the year, signaling a clear commitment to rewarding shareholders.

In H1, the bank's wealth solutions arm delivered impressive results, rising 25%, producing a record performance for the company. Net new sales more than doubled to $13 billion, and Wealth AUM increased by 12% since December 31, 2023, to $135 billion.

Q2 net interest income (NII) rose by 6% to $2.6 billion, driven by the short-term hedge roll-off and benefit from treasury optimisation.

Meanwhile, the global banking division also contributed to the strong overall performance, with income rising by 14% in H1, driven by higher origination and distribution volumes, executing on a strong pipeline.

Despite inflationary pressures, Standard Chartered managed to improve its cost efficiency, with the cost-to-income ratio falling by four percentage points to 57%. This demonstrates the bank's ability to control expenses while driving revenue growth.

Looking ahead, the bank has raised its income growth guidance for 2024 to above 7%, reflecting its positive outlook. Net interest income for 2024 is expected to be between $10 billion and $10.25 billion.

While Standard Chartered has faced challenges in recent years, including setbacks related to China's commercial real estate crisis and strategic exits from certain markets, these latest results highlight the bank's resilience and ability to capitalise on growth opportunities.

The bank's strong performance and commitment to shareholder returns have undoubtedly boosted investor confidence, driving up its share price.