StanChart raises targets, to begin buyback as full-year profit doubles

A Standard Chartered logo is displayed at its main branch in Hong Kong, China August 1, 2017. REUTERS/Bobby Yip

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  • Reports 2021 profit of $3.3 billion vs $3.8 billion forecast
  • The Bank advances its objective of a 10% return by 2024
  • Says rate hike, cost cut to increase profits
  • Said to begin $750 million share buyback shortly

SINGAPORE/LONDON, Feb 17 (Reuters) – Standard Chartered (STAN.L) raised key profitability targets and promised shareholders additional payouts on Thursday, despite earnings falling short of expectations for the full year, as that it is banking on inflation-fighting rate hikes around the world to boost lending.

“Confidence in the overall quality of our assets and the trajectory of our earnings enables us to return significant capital to shareholders,” Chief Executive Bill Winters said in a statement.

Winters, who repaired StanChart’s balance sheet and cut thousands of jobs after becoming CEO in 2015, has recently come under pressure to drive growth and lift the bank’s share price. The London-listed share is around 45% below the level when Winters took charge.

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StanChart’s pretax statutory profit doubled to $3.3 billion in 2021 from $1.6 billion in 2020, but missed 16 analysts’ average estimate of $3.8 billion, as compiled by the lender.

The update from the emerging markets-focused lender, the first major UK bank to publish its annual results, gave an early indication of how the central bank’s interest rate hike will help lenders even as they struggle to improve the underlying performance.

The London-based bank expects revenue to grow by a further 3% a year as it benefits from rising interest rates as policymakers seek to turn off years of cheap funding to combat pressures inflationary.

StanChart, which makes most of its revenue in Asia, announced a $750 million share buyback, starting imminently, and a dividend of 12 cents per share for 2021, up a third from 2020.

The bank, which bases its business on capturing trade flows between its core markets in Asia, Africa and the Middle East, reported credit impairment charges of $263 million, down from $2.3 billion. dollars a year earlier.

It said it would cut some $500 million in spending from its consumer banking division as part of the broader $1.3 billion cost-cutting campaign aimed at improving overall returns.

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Reporting by Anshuman Daga in Singapore and Lawrence White in London; Editing by Carmel Crimmins, Sam Holmes and Jane Wardell

Our standards: The Thomson Reuters Trust Principles.

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