Standard Chartered (STAN) Q3 2024 earnings summary

Executive summary

• Q3 2024 operating income rose 12% year-on-year, with profit before tax up 41%, led by record Wealth Solutions and strong Global Markets growth.

• ROTE reached 10.8%, up 4 percentage points year-on-year; TNAV per share climbed 18% to $15.09.

• Strategic focus on cross-border CIB and affluent wealth management, with $1.5bn investment planned in WRB over five years.

• 2026 ROTE target raised to approaching 13%; shareholder distribution target increased to at least $8bn for 2024-2026.

Financial highlights

• Operating income reached $4.9bn, up 12% year-on-year; net interest income was $2.6bn, up 9%.

• Non-interest income rose 15%, driven by Wealth Solutions (income up 32%) and Global Markets (up 16%).

• Operating expenses up 2-3% year-on-year; cost-to-income ratio improved to 58%.

• Credit impairment down $116m year-on-year; overlays applied for Hong Kong CRE and Korea e-commerce.

• CET1 ratio at 14.2%, including impact from $1.5bn share buyback; TNAV per share up $0.65 in Q3, 18% year-on-year.

Outlook and guidance

• 2024 income growth guidance upgraded to approach 10%; 2025-2026 CAGR expected at 5-7%, with 2025 below range due to NII headwinds.

• NII for 2024 expected at $10bn-$10.25bn; 2025 NII growth will be more challenging.

• Expenses targeted below $12bn by 2026; positive income-to-cost jaws targeted annually.

• ROTE to approach 13% in 2026 and progress thereafter; CET1 ratio to be managed within 13-14%.

• Shareholder distributions of at least $8bn planned for 2024-2026.