Standard Chartered Posts Narrower Q4 Loss, Ups Dividend; Sees Income Growth; Stock Down

Economy

British bank Standard Chartered Plc reported narrower loss in its fourth quarter with increased operating income, while net interest income was weak. Further, the company announced higher dividend, along with a share buy-back programme of $750 million, which will start imminently. The shares were losing around 4 percent in London trading.

Looking ahead, Andy Halford, Group Chief Financial Officer, said, “We have had a solid start to 2022 and we expect income to grow in the 5-7 percent range with mid-single digit asset growth and an increasing likelihood of some support from interest rates, which should help support margins particularly in the later part of the year.”

The company now expects medium-term cost of risk to normalise between 30-35 basis points, slightly lower than previous medium-term guidance of 35-40 basis points.

Looking beyond 2022, the company expects to deliver a 10 percent return on tangible equity by 2024, and to deliver 8 to 10 percent income growth per annum between 2022 and 2024, with 5-7 percent from underlying business growth and a further 3 per cent from rising interest rates.

The company proposed a final ordinary dividend per share of 9 cents, resulting in a full-year dividend per share of 12 cents, up 33 percent

For the fourth quarter, loss before taxation was $208 million, narrower than last year’s loss of $449 million.

Underlying profit before taxation was $139 million, compared to loss of $192 million a year ago. Underlying loss per share was 5.7 cents, compared to loss of 13.5 cents last year.

Operating income grew 5 percent to $3.31 billion from $3.15 billion a year ago. Operating income grew 6 percent at constant currency rates.

Underlying operating income increased 4 percent to $3.33 billion. Net interest income, meanwhile, declined 4 percent to $1.70 billion.

In London, Standard Chartered shares were trading at 524.80 pence, down 4.34 percent.

In Hong Kong, the shares closed Thursday’s trading at HK$57.05, down 2.23 percent.

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