Income is expected to grow 5-7% annually from 2025 to 2028, with high-teens earnings per share (EPS) growth (consensus: 5.2% income growth, 17.8% EPS growth)
Return on Tangible Equity is expected to be above 15% by 2028, rising to around 18% by 2030 (consensus: 15.1% for 2028).
A cost-to-income ratio of ~57% targeted by 2028 (2025: 63%), alongside ~20% higher income per employee, and a more than 15% reduction in corporate roles by 2030.
Capital targets are unchanged, including a CET1 range of 13-14% and a payout ratio of at least 30%, while the $200bn net new money wealth target has been brought forward one year to 2028.
The shares were broadly flat in early trading.
Our view
Standard Chartered has started the year well, with a high-quality profit beat as non-interest income from areas like wealth management did the heavy lifting and costs were kept in check. Top-line guidance was kept at the bottom of its mid-term range, but there is a chance it could improve if momentum continues.
Medium-term targets have been updated, with the bank now aiming for stronger returns, better efficiency, and sustained income growth through to 2028 and beyond. The headline goals look broadly achievable rather than wildly ambitious and sit comfortably with the existing analyst consensus.
Standard operates a sprawling business, both geographically and in terms of product ranges. This offers a nice spread, 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.
There is also the issue of Middle East exposure (around 6% of the business), and management has increased provisions to brace for potential weakness in the area. There’s no impact yet, but it’s currently being managed as a real risk.
Rates in Hong Kong have become a headwind again, after stabilising momentarily. In fact, rates remain a headwind more broadly, with management signalling a competitive pricing approach in some markets to protect net interest margins and franchise strength.
Institutional banking in areas like trade finance, cash management, and trading make 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 Asian wealth management is 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 already 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 that yields are variable and not a reliable indicator of future income. Keep in mind that 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.