StanChart posts 'strong' first half, confident on full-year outlook

StanChart shares jumped at the end of the week after delivering what the lender itself labelled a "strong" set of first half figures, announced a new $500m share buyback programme and expressed confidence on its full-year targets.

Commenting on the group's performance, chief executive officer, Bill Winters, highlighted the "continued positive" momentum seen during the quarter, discipline on expenses and significant savings.

Income for the half was ahead by 8% to $8.2bn or by 10% at constant currencies and during the second quarter it was 11% higher at constant currencies.

That saw a 10% jump in statutory pre-tax profits for the latest six months to $2.8bn.

Higher interest rates meanwhile pushed NatWest's net interest margin up by 6bp to 1.35% over the quarter just ended.

The Asia-focused lender also said that it had seized the "China opportunity", noting record first half income for onshore China income and strong network income growth in the China-ASEAN corridor which grew 36% year-on-year.

Corporate, Commercial and Institutional Banking recorded a 110 basis improvement in its returon on risk-weighted assets to 6.0%.

In Consumer, Private and Business Banking meanwhile its cost-to-income ratio improved by two percentage points to 72.0%, for gross expense savings of $98m over the half.

Structural cost savings for the six months to June were put at $199m.

Furthermore, at 13.9%% its Common Equity Tier 1 capital cushion remained near the top end of 13-14% target range.

Credit impairment charges fell by $133m over the three months to June, but increased by $314m year-on-year for the half to reach $267m.

Looking ahead, StanChart said that: "the start to 2022 has been strong, albeit external conditions remain difficult to predict."

Income growth for the full-year was pegged at around 10% at constant currencies and before debt valuation adjustments, while the hit from currency translation was seen at about $0.4bn.

The full-year 2022 average for net interest margins was seen at 140bp and 160bp in 2023.

StanChart also said it was on track to deliver a 10% return on tangible equity by 2024, when not earlier.

An interim ordinary dividend of 4 cents per share was declared.