Standard Chartered lifts outlook after bumper third quarter

Standard Chartered lifted its full-year guidance on Wednesday, after a record performance in its wealth division helped third-quarter profits beat expectations.

The Asia-focused bank, which is headquartered in the UK, said operating income rose 11%, or 12% on a constant currency basis, to $4.9bn in the three months to September end.

Within that, net interest income jumped 9% to $2.6bn - ahead of expectations for $2.57bn - while wealth solutions soared 32% to $694m. StanChart said there had been broad-based growth across products in the division.

Group underling pre-tax profits jumped 41% to $1.8bn, comfortably beating forecasts for $1.59bn.

Bill Winters, chief executive, said: "We have delivered a strong performance in the third quarter…driven by a record quarter in wealth solutions and strong growth in our global markets business.

"We are doubling investment in our consistently fast-growing and high-returning wealth management business and we will continue to reshape our mass retail business to focus on developing our pipeline of future affluent and international banking clients."

Looking to the rest of the year, StanChart said underlying operating income was now expected to come in 10% higher year-on-year on a constant currency basis. It follows an earlier uplift to forecasts in July, when the outlook was increased to 7% from an earlier range of between 5% and 7%.

The blue chip will also look to return at least $8bn to shareholders over 2024-2026, up from $5bn, and upwardly revised medium-term operating income targets.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "The banks keep delivering, with Standard Chartered posted a 16% beat on pre-tax profit, driven by strong income numbers.

"There are some big growth numbers being thrown about today. But longer term question markets remain about the sprawling footprint and how Standard Chartered delivers continued loan and deposit growth in challenging markets. The valuation looks attractive on paper, but some other UK names offer better return profits and growth prospects."