Standard Chartered posted a higher than expected 57 per cent jump in first-half pretax profit and announced a $250 million share buyback. The bank is also resuming dividend payments by unveiling a 3 cents per share interim payout.
Statutory pre-tax profit for StanChart, which focuses on Asia, Africa and the Middle East, rose to $2.55 billion in January-June from $1.63 billion in the same period last year, London-headquartered bank said in a stock exchange filing.
The latest profit compared with the $2.23 billion average of analyst estimates compiled by Standard Chartered.
Standard Chartered Chief Financial Officer Andy Halford spoke to CNBC shortly after the earnings release, expressing optimism about the trajectory for the program of share buybacks and dividends for the rest of the year.
“We’ve been very clear that to the extent we have excess capital, we will be delighted to return that to shareholders if there are not profitable opportunities to invest that money,” Halford told CNBC’s Geoff Cutmore.
“We’ve said today that we’ll do another quarter of a billion-dollar buyback, we did a quarter of a billion buyback earlier this year, so it’s the second time this year. This time last year, we were not paying interim dividends … So as the profitability of the business picks up, we will be returning more to shareholders.”
Improved loan impairments helped StanChart’s profit boost, and the bank was also able to release $47 million it had set aside last year to cover a potential increase in bad loans due to the pandemic.
However, the bank released less than the larger-rival HSBC did a day earlier.
Income fell 5 per cent, which the bank blamed on low-interest rates that it said were now likely at their trough.
Costs rose 8 per cent, mainly due to higher pay for bankers as StanChart, in common with its rivals, boosted bonuses to try and retain key staff as banks’ profits rebound.