Standard Chartered (StanChart) is on track to achieve a key profitability goal a year ahead of schedule after reporting better than expected third quarter earnings. The impressive results are a direct payoff from the London-headquartered bank’s strategic shift toward fee-generating businesses, particularly in wealth management.
The bank posted a third-quarter pretax profit of $1.77 billion, marking a 3% increase from the prior year and significantly topping the analyst consensus of $1.52 billion. This outperformance was driven by robust revenue from its wealth and global banking segments.
The latest earnings update validates CEO Bill Winters’ strategy to invest in wealth management and restructure its advisory business, positioning the Asia and Africa-focused lender to secure more deals.
- Wealth management income surged 27% in the third quarter, fueled by increased inflows and new accounts, as clients sought wealth advice amid market volatility.
- The bank has set an ambitious goal to reach $200 billion in new assets and achieve double-digit income growth from its wealth business over the next five years.
- Capital markets and advisory fee income grew 33%, benefiting from a rebound in corporate confidence and increased mergers and acquisitions activity.
StanChart is now forecasting its income growth this year to be at the top end of its 5% to 7% guidance range. Consequently, it now expects to reach its 13% return on tangible equity goal, a vital profitability metric, in 2025 instead of the previously forecast 2026.
StanChart Chief Financial Officer Diego De Giorgi noted a positive shift, stating that global clients, who were previously hesitant, began making more consequential decisions in the third quarter, boosting worldwide revenue.
On the stock market, StanChart’s shares rose 1.3% in London, making it one of the top performers on the benchmark FTSE 100 index. StanChart shares have soared 53% this year, dramatically outpacing rivals like HSBC.
Regarding the volatile US-China relationship, De Giorgi commented that anything reducing policy uncertainty is positive for improving business and investor confidence, though he described the situation as a “long game.”