Asia and Africa-focused bank Standard Chartered (STAN) announced a $1.5 billion share buyback and a 65% dividend hike. However, the news was overshadowed by Q4 and FY results which marginally missed market expectations sending the shares lower.
| Share price: £17.92 (-1.2%) | PE: 13x |
| Market cap: £40.75bn | Yield: 1.6% |
Strong underlying results
According to CEO Bill Winters, 2025 was ‘another year of strong momentum’ for the bank. ‘We’re seeing robust growth in our larger markets, and structural shifts in global trade and investment play to our strengths’, added Winters.
For the full year, the bank posted a 6% increase in operating income to $20.9 billion. Growth mostly came from fee income, which rose by 13% to $9.7bn driven by wealth, global banking and global markets.
The wealth business grew its income by 24%, while global banking income rose 15% and global markets income rose 13%. The bank said it benefitted from higher loan demand, increased capital markets activity and flow income.
Underlying pre-tax profit rose 18% to $7.9 billion, while underlying return on tangible equity increased from 11.7% to 14.7%. That topped the firm’s three-year plan a year early, paving the way for the buyback and dividend hike.
However, FY net profit of $4.56 billion was slightly below analysts’ estimates of $4.77 billion due to a dip in Q4. Therefore, although the bank’s Hong Kong-listed shares rose 3% to HKD 198, the UK shares drifted 1% lower.
The $1.5 billion buyback will start ‘imminently’, while the final dividend of 49c/share takes the FY25 payout to 61c/share. That represents a 65% increase on the previous year and represents a payout ratio of 31% of reported EPS.
There isn’t much to add on Standard Chartered, which has been one of the stealth winners of the last couple of years. Since early 2024, the shares have risen more than 200% from 600p to today’s £18 or thereabouts.
For all that Trump’s tariffs have impacted global trade flows, they have actually helped firms like Standard Chartered. The bank has been supporting businesses in faraway places for nearly 170 years, giving it deep relationships.
The earnings miss is nothing major, but it’s interesting the shares are down despite the buyback and dividend hike. As we have argued previously, buying back shares doesn’t create economic value despite the market’s enthusiasm.
Read the full press release here: https://www.sc.com/en/investors/
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