Third-quarter income rose 14%, ignoring currency moves, to $5.8bn ($5.6bn expected). Net interest income rose 9% and non-interest income rose 19%.
Profit before tax rose 29% to $2.3bn ($2.0bn expected). Credit quality remained resilient, with impairments of $90mn ($221mn expected).
The group's CET1 ratio, a key capital measure, was 13.8% at the end of the period (13-14% target range).
Full-year guidance was upgraded again. Income growth is now expected to come in above the 5-7% range (previously around the middle). Net interest income is now expected to grow around 4% (previously a low single-digit rate).
The shares rose 3.5% in early trading.
Our view
Standard Chartered kept its momentum going in the third quarter, with a broad-based beat led by Wealth Solutions and Global Markets, alongside lower-than-expected impairments. A second guidance upgrade in as many quarters, now including a higher return target for 2026, shows that confidence in the outlook is still building.
Medium-term targets remain unchanged, with the bank aiming for a return on tangible equity above 15% in 2028 and around 18% by 2030. With returns running at 17% so far this year, those goals look increasingly achievable.
Standard operates a sprawling business, both geographically and across its product range. This offers diversification, but it comes at a cost. The only market where it is a clear leader is Hong Kong, with the bank playing second fiddle to larger names across much of Asia, Africa and Europe.
Middle East exposure remains a risk, with a further provision set aside this quarter to reflect potential Red Sea disruption, taking conflict-related provisions to $268mn this year. However, the portfolio is weighted towards high-quality corporate and government-linked borrowers, and broader credit quality has improved.
The interest rate backdrop has turned more supportive, with markets now pricing in higher rates next year, including in Hong Kong. Net interest income is expected to grow around 4% this year, though customers moving cash into higher-paying fixed-term deposits is limiting how much of that benefit flows through.
Institutional banking in areas like trade finance, cash management and trading makes up the bulk of the operation. In retail banking, the focus is heavily skewed towards more affluent customers, where higher growth is on offer.
These are likely to remain the key growth engines. Standard has spent several years investing in Global Markets and Wealth Solutions to build income streams that are less dependent on interest rates. Wealth brought in a record $20bn of new money this quarter, albeit boosted by a one-off Indian scheme. These businesses also use less capital, supporting further buybacks when conditions allow, although shareholder returns are never guaranteed.
The balance sheet remains in good shape, with the CET1 ratio at 13.8% after the latest buyback. New banking rules will push up risk-weighted assets from January, which could leave the bank running closer to the bottom of its 13-14% target range, though lower regulatory minimums soften the blow.
All in, Standard still needs to show that it can deliver consistently across the cycle. With the shares trading above their longer-term average valuation, we think that other names in the sector offer a better balance of risk and potential reward.
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.