StanChart shares hit near decade peak after profit rise, $1.5 billion buyback

By Selena Li

HONG KONG (Reuters) - Standard Chartered announced a new $1.5 billion share buyback on Friday after reporting its annual profit rose 18% on record growth in its wealth business and a strong performance of its markets division, driving its shares to a near-decade high.

The Asia, Africa and Middle East-focused bank is doubling down on its mainstay wealth management and markets business, even as an uncertain global growth outlook and a divergent interest rate policy are expected to cast a cloud over Western banks in the near term.

"Growth in our footprint markets across Asia, Africa and the Middle East is set to outpace global growth... and we are uniquely positioned to take advantage of this," StanChart CEO Bill Winters said in the bank's earnings statement.

StanChart's Hong Kong-listed shares reversed earlier losses, rising 4.4% to HK$116 ($14.93) apiece at close, the highest since July 2015, slightly outpacing the market benchmark index which was up 4%.

Its London shares were up around 5% at market open.

Michael Makdad, senior market analyst at Morningstar, said the $1.5 billion new share buyback was larger than some expectations of an initial buyback of around $1 billion.

The London-based lender reported pretax profit for 2024 of $6 billion, up from $5.1 billion the year before and slightly below the $6.2 billion average of analysts' forecasts as compiled by the bank.

StanChart has said it would invest $1.5 billion over five years in wealth and digital platforms, client centres, people and brand and marketing, to accelerate income growth and returns.

"We are confident that our increased investment and greater concentration will help us to outperform the market in terms of asset gathering and income growth over the medium term," Winters said in the statement.

BOOST FROM NEW WEALTHY CLIENTS

The bank has said it is targeting $200 billion of net new money, or assets generated from existing and new clients, from 2025 to 2029, a double-digit compounded annual growth rate in wealth solutions income from 2024 to 2029.

StanChart said it acquired 265,000 new wealthy clients in 2024, who in total brought in $44 billion of new money, which is 61% higher than a year earlier.

It also announced a final dividend of 28 cents per share.

StanChart's results mirrored rival HSBC's, which earlier this week reported a 6.6% annual increase in pretax profit, slightly ahead of estimates, with wealth and personal banking profit rising 5.2% from a year ago.

However, the market is increasingly concerned international banks helping global trade and investment may take a blow from unilateral U.S. tariffs. StanChart said it saw limited pressure on its institutional businesses.

"US-China cross border income is relatively small. It's only around 1% of our total corporate and investment banking income,” Winters said during call on the earnings, adding the bank was not over-reliant on any one trade and investment corridor.

Both StanChart and HSBC are trying to grow their fee-based income streams such as wealth management, to compensate for declining interest income as central bank rate cuts worldwide eat into the margins lenders make.

StanChart is also retreating from areas where it lacks scale, particularly in retail banking in many markets where regulatory costs and competition from local players have made it harder for global banks to muscle in.

($1 = 7.7714 Hong Kong dollars)

(Reporting by Selena Li; Editing by Sumeet Chatterjee, Muralikumar Anantharaman and Emelia Sithole-Matarise)