Standard Chartered upgrades 2026 guidance amid stronger first-half earnings

Standard Chartered published first-half results yesterday with the group announcing earnings-per-share growth of 17 percent. The bank also upgraded its income guidance for the year while reporting new share buybacks of US$1 billion. An interim dividend of 20.4 cents per share was disclosed as well.

First-half net interest income rose 4 percent while non-interest income gained 8 percent, both within management’s guidance. Operating income was US$11.6 billion, a 6 percent increase due in part from stronger growth in wealth solutions, global banking, and global flow income divisions.

Credit cost was 1 percent higher. However, credit impairments jumped 29 percent, driven by management overlays relating to uncertainty in the Middle East, which accounts for 6 percent of the group’s exposure, mostly via corporate and investment business units. 

Return on tangible equity (RoTE) rose 120 basis points to 17.6 percent, above its greater-than 12-percent target for the year. The bank reconfirmed its 15 percent RoTE goal by 2028 and 18 percent by 2030. 

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The bank has become an industry bellwether after announcing plans to leverage artificial intelligence to streamline the group’s operational efficiency and cut costs. Back in May, it was reported that the company would eliminate nearly 8,000 back-office roles by 2030, an amount representing more than 15 percent of total headcount.

Meanwhile, analysts have also flagged possible strains on wealth business units due to more stringent capital curbs. Back in June, Bloomberg Intelligence estimated that in a worst-case scenario, Standard Chartered could face a 30 percent drop in new wealth money flows, impacting pretax profits by 1 to 3 percent.