Standard Chartered’s Share Price Surged 8.27% on FY23 Results

The Standard Chartered PLC (LON: STAN) share price surged 8.27% after releasing its fourth quarter and full-year 2023 earnings results. The British multinational bank announced an 18% increase in pre-tax profit for 2023, aligning with expectations, and declared a $1 billion share buyback and an enhanced dividend for its shareholders.

The bank, which predominantly operates in Asia, disclosed a statutory pre-tax profit of $5.09 billion for 2023. This figure matches the average of $5.1 billion predicted by 15 analysts as gathered by the institution.

Standard Chartered faced a significant impairment of $850 million, mainly attributable to its investment in Bohai Bank in China. This marks the second occasion the bank has had to adjust the valuation of this subsidiary, following an increase in non-performing loans amid a slowdown in China's economy.

The substantial impairment in China highlights the difficulties Standard Chartered confronts in expanding its footprint in the nation amidst efforts by local authorities to tackle a growing real estate dilemma and dwindling consumer confidence.

The bank's additional $150 million reduction in the value of its Bohai Bank investment, on top of a $700 million reduction earlier in the year, decreased its valuation to $700 million, down from $1.5 billion at the year's commencement.

Standard Chartered attributed the decrease in the value of investments to the banking sector's broader challenges and ongoing uncertainties in the real estate market. The bank, headquartered in London, also declared a final dividend of $560 million, or 21 cents per share. This signifies a 50% rise in its annual dividend to 27 cents per share, surpassing the anticipated consensus of 23.7 cents.

CEO Bill Winters expressed the bank's aim to return a minimum of $5 billion to its shareholders over three years. Looking ahead, Standard Chartered has moderated its growth outlook, forecasting a 5-7% revenue increase from 2024 to 2026, compared to a 10% growth rate in 2023.

The bank plans to gradually elevate its return on tangible equity, an essential measure of profitability, from 10% to 12% by the end of 2026. 

Group Chairman José Vinals remarked on the persistence of inflationary pressures and the ongoing geopolitical risks, notably mentioning the continued conflict between Ukraine and Russia as a source of increased uncertainty for European nations and the broader global community.

Stanchart Chartered share price. 

The Standard Chartered share price surged 8.27% to trade at 656.25p from Thursday’s closing price of 606.10p.