Standard Chartered reported a 9% rise in first-quarter income, ignoring currency impacts, to $5.9bn. Performance was driven by non-interest income, which rose 16%, with strong growth in Wealth Solutions and Global Banking, while net interest income was up 1%.
Profit before tax was up 17% to $2.5bn ($2.1bn expected). Credit quality remained resilient, though impairments rose to $296mn, mostly driven by $190mn relating to the Middle East conflict.
The group’s CET1 ratio, a key capital measure, was 13.4% at the end of the period (13-14% target range). The $1.5bn buyback announced in February is ongoing, with over half completed.
2026 guidance remains unchanged, pointing to top-line income growth around the bottom end of a 5-7% range. Net interest income and reported costs are both expected to be broadly flat.
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 the range, but there is a chance it could improve if momentum continues.
Solid progress last year meant 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 (Q1: 17.4%). Markets don’t seem overly convinced that first-quarter momentum is here to stay, and hitting that return number is highly reliant on strong growth from more volatile non-interest income. Though we would flag that diversification in this area is improving.
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 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.