Standard Chartered reported flat fourth-quarter income of $4.8bn ($4.9bn expected), ignoring currency impacts. Performance was broadly flat across traditional lending and non-interest income (which includes wealth management and investment banking).
Underlying profit before tax was up 19% to $1.2bn ($1.3bn expected). Credit quality remains strong, with lower impairments than expected.
The group’s CET1 ratio, a key capital measure, was 14.1% at the end of the period (target 13–14%). A final dividend of $0.49 was announced, bringing the full-year dividend to $0.61, up 65%. There was also a new $1.5bn buyback programme announced.
2026 guidance points to top-line income growth toward the bottom of a 5-7% range (consensus 3%).
The shares were broadly flat in early trading.
Our view
Standard Chartered’s results were untidy at first glance, with profits missing expectations as weaker global markets income and higher costs outweighed a steady lending performance. That said, shareholders got a pleasant surprise from stronger capital returns, with a bigger dividend and a new buyback announced. More importantly, new guidance implies an upgrade to 2026 profit expectations.
Solid progress means some fresh targets. Volume growth, cost cuts and a benefit from the structural hedge are expected to help deliver a return on tangible equity in excess of 12% in 2026 (2025: 11.9%). Markets have begun to price in that outcome, but we think there are still some risks as it’s highly reliant on strong growth from more volatile non-interest income.
Standard operates a sprawling business, both geographically and in terms of product ranges. This offers some nice diversification, but it comes at a cost. The only market it's really a leader in is Hong Kong, with it playing second fiddle to other names in wider Asian, African, and European markets.
Rates in Hong Kong have stabilised after a sharp cutting cycle, which should ease some of the pressure seen last year. That said, lower rates remain a headwind more broadly, with management signalling a competitive pricing approach in some markets to protect margins and franchise strength.
But traditional banking (deposits and lending) is a relatively small part of the pie, with institutional banking in areas like trade finance, cash management, and trading making up the bulk of the operation. In retail banking, the focus is heavily skewed to the more affluent areas of the market where higher growth is on offer.
These are likely to be the business areas driving growth over the coming year. Standard has spent several years investing in the Financial Markets and Wealth Management divisions to help drive income that’s less dependent on interest rates. These divisions are also less capital-intensive, which gives a little more wiggle room for things like buybacks – though none are ever guaranteed.
The balance sheet’s in a good place, and there are growth drivers to work on. Management has done a decent job of spelling out the moving parts, and we think areas like Asian wealth management are an attractive segment to fuel growth.
That said, there’s still work ahead to convince markets that it can consistently deliver, and with a lot of optimism now priced in, we think other names in the sector offer better near and longer-term outlooks.
Environmental, social and governance (ESG) risk
The financials sector is medium-risk in terms of ESG. Product governance is the largest risk for most companies, especially those in the US and Europe with enhanced regulatory scrutiny. Data privacy and security are also an increasingly important risk for banks and diversified financial firms. Business ethics, ESG integration and labour relations are also worth monitoring.
According to Sustainalytics, Standard Chartered’s management of material ESG issues is strong.
Standard’s strong programs and policies are offset by involvement in multiple controversies, reducing its management score. However, the bank has improved disclosure in areas like data privacy, security, and product governance. It introduced external cybersecurity assessments designed by the Bank of England and Prudential Regulation Authority, and has management in place to ensure responsible product offerings. Improvement areas include lack of transparency in gender pay, high employee turnover, and poor integration of ESG into asset management.
Standard Chartered key facts
All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.