Standard Chartered announces $1bn buyback scheme after profits soar on rising rates
Standard Chartered announced a further $1bn (£780m) share buyback after recording better than expected results in the second quarter on the back of rising interest rates.
Pretax profit at the bank climbed 18 per cent to $1.5bn, higher than the $1.4bn predicted by analysts.
This came thanks to a 29 per cent increase in net interest income, which was nearly $400m more than expected. Its wealth management and financial markets division also recorded strong performances.
“We remain strongly profitable, highly liquid, and well capitalised. These attributes enable us to return a further $1bn to our shareholders through a new share buy-back announced today,” chief executive Bill Winters said.
The bank upgraded its outlook for the rest of the year, forecasting that its income would increase by between 12 and 14 per cent while its net interest margin for the year would be around 170 basis points.
Its shares were trading 4.3 per cent higher on Friday afternoon, taking it to the top of the FTSE 100.
Growth in Asia is predicted to be more than double the rate of Western growth, according to the bank, helping to drive its performance going forward.
Impairment charges came in at $146m, higher than the $66m reported last year. This principally related to the Chinese commercial real estate market.
Standard Chartered is attempting to streamline its global operations. Earlier this month it announced its exit from subsidiaries in sub-Saharan Africa, having exited Zimbabwe, sold its Jordanian business to Arab Jordan Investment Bank and cut around 100 jobs worldwide.
The emerging markets focused lender is aiming to reduce costs by more than $1bn by 2024.
The bank has been a target of takeover talks in recent months with First Abu Dhabi Bank confirming in January it had been interested in acquiring the bank.