SINGAPORE/LONDON: Standard Chartered raised its core profitability goals and promised shareholders extra payouts on Thursday, despite full year profit undershooting expectations, as it banks on inflation-battling rate hikes worldwide to boost lending.
"Confidence in our overall asset quality and earnings trajectory allows us to return significant capital to shareholders," Chief Executive Bill Winters said in a statement.
Winters, who repaired StanChart's balance sheet and slashed thousands of jobs after he became CEO in 2015, has more recently come under pressure to boost growth and lift the bank's flagging share price. The London-listed stock is around 45% below the level when Winters took charge.
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StanChart's statutory pre-tax profit doubled to $3.3 billion in calendar 2021 from $1.6 billion in 2020, but missed the $3.8 billion average estimate of 16 analysts, as compiled by the lender.
The update from the emerging-markets focused lender, the first major British bank to report annual results, gave an early indication of how rising central bank interest rates will help lenders even as they battle to improve underlying performance.
The London-headquartered bank expects revenue to grow by an extra 3% per year as it benefits from rising interest rates as policymakers look to turn off years of cheap funding to fight inflationary pressures.
StanChart, which earns most of its revenue in Asia, announced a $750 million share buyback, starting imminently, and a 12 cents per share dividend for 2021, up a third on 2020.
The bank, which bases its business on capturing trade flows between its key markets of Asia, Africa and the Middle East, reported credit impairment charges of $263 million, versus $2.3 billion a year earlier.
It said it will cut some $500 million in expenses from its consumer banking division as part of the bank's broader $1.3 billion cost-cutting drive aimed at improving overall returns.
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