Standard Chartered increases projection, reports $1 billion share buyback after profit bounces 28%

February 17, 2023: -On Thursday, Standard Chartered increased a key performance metric and unveiled a recent $1 billion share buyback program after reporting a 28% increase in annual pretax profit as international interest rate hikes boosted its lending earnings.

StanChart’s performance, such as that of global peers, was helped by aggressive central bank interest rate hikes to combat inflation, which allowed lenders to charge more following a decade of near-zero rates.

The Asia, Africa and Middle East-focused bank has been the subject of takeover speculation connected with First Abu Dhabi Bank (FAB) FAB.AD said its recent share buyback exercise would begin imminently. Its shares increased 3.5% in Hong Kong after the announcements.

“We are upgrading our anticipation and are targeting a return on tangible equity coming 10% in 2023, to go over 11% in 2024, and to continue to grow after that,” Chief Executive Bill Winters said.

London-headquartered StanChart previously aimed for 10% for 2024. The equity return is a key profitability metric for banks.

StanChart’s shares have improved on renewed takeover speculation, with FAB being far with the media reports that it was eyeing a bid.

Still, StanChart shares are nearly 25% below the levels when Winters took account in June 2015, whereas the shares of peer HSBC Holdings are flat, and the benchmark FTSE index has increased about 15%.

FAB, United Arab Emirates’ biggest lender, previous week said it was not now evaluating the offer for the bank, having last acknowledged it had at one time game on a potential bid.