Standard Chartered Plc lifted its income and return outlook as it reported third-quarter profit that beat analyst estimates, boosted by a record quarter for wealth solutions.
Adjusted pretax profit rose to $1.99 billion, beating the $1.79 billion consensus analysts’ estimate compiled by Bloomberg. The performance was largely a result of the bank’s wealth management unit and global banking.
“We now expect to deliver an underlying return on tangible equity of around 13 percent in 2025, hitting our target a year earlier than planned,” Chief Executive Officer Bill Winters said in a statement on Thursday.
Like its larger rival HSBC Holdings Plc, Standard Chartered is in the midst of its own restructuring program known as ‘Fit for Growth’ that involves several hundred initiatives across the bank aimed at saving everything from a few hundred thousand to tens of millions of dollars.
The program is now in the second of its three-year delivery phase, with much of the savings expected to come this year and next. The bank reported a $138 million charge related to the program in the quarter.
The bank’s shares extended gains, rising as much as 4.25 percent to HK$159.50, the highest in over a decade.
The lender said income growth for 2025 is now expected to be toward “the upper end of the 5-7 percent range” after previously guiding to around the bottom of the range. It also upgraded its guidance on return of tangible equity to “around 13 percent” in 2025 from approaching 13 percent in 2026.
ALSO READ: StanChart announces buyback, raises targets as profit doubles
Income from global banking, including lending and capital markets, rose 24 percent to $588 million, while wealth solutions had a record quarter with income jumping 28 percent.
Like many banks in Hong Kong, Standard Chartered is riding a boom in the wealth business as the lender is in the process of bolstering its wealth management arm. A year ago, the bank said it was doubling its planned investment in serving affluent clients to $1.5 billion over the next five years. The aim is to bring in $200 billion of net new money into the bank between 2025 and 2029 and boost the share of its wealth and retail banking division’s income to three-quarters of the total.
Net inflows were $13 billion in the quarter, with 67,000 new wealthy clients.
Amid a spotlight on private credit, with recent failures of subprime auto lender Tricolor and auto-parts supplier First Brands, Standard Chartered said its private credit exposures are below $3 billion, less than 0.5 percent of the group’s total. Its exposures are linked to providers of non-banking lending to corporates and regular portfolio reviews show “no material issues.”
Credit impairments rose to $195 million in the quarter, up from $178 million a year earlier.
