Standard Chartered announces record share buy-back after profits beat estimates

Standard Chartered, one of Hong Kong’s three currency issuers, announced a multibillion-dollar share buy-back programme amid a rise in pre-tax profits driven by its wealth business.

The London-headquartered bank, which derives most of its business in Asia, reported a 15 per cent increase in second-quarter pre-tax profit to US$1.8 billion, beating analysts’ estimates of US$1.6 billion.

The bank said it would repurchase a record US$1.5 billion of shares as it looks to return a total of US$5 billion to shareholders by 2026.

“We produced a strong set of results for the first half of the year, demonstrating the value of our franchise as a cross-border corporate and investment bank and a leading wealth manager for affluent clients,” CEO Bill Winters said in an earnings statement to the Hong Kong stock exchange on Tuesday.

Net interest income for the three months to June rose 6 per cent to US$2.6 billion, as the bank benefited from treasury operations. The bank’s net interest margin grew to 1.93 per cent versus 1.71 per cent a year earlier.

Second-quarter operating income, the equivalent of revenue in US accounting terms, rose 6 per cent year on year to US$4.8 billion.

The bank’s wealth unit performed admirably, growing 25 per cent year on year to US$618 million, benefiting from the launch of new products and addition of rich clients.

Net new sales more than doubled to US$13 billion and wealth assets under management at the end of June stood at US$135 billion, an increase of 12 per cent since the end of last year, the filings showed.

The bank announced an interim ordinary dividend of 50 per cent to 9 US cents per share.

Standard Chartered, which fell 1.9 per cent before the earnings report at the midday lunch break, jumped 3.7 per cent to HK$76.00 in afternoon trading.