Standard Chartered posted a higher than expected 57% jump in first-half pretax profit and announced a US$250 million share buyback, with the bank also resuming dividend payments by unveiling a three cents per share interim payout.
Statutory pretax profit for StanChart, which focuses on Asia, Africa and the Middle East, rose to US$2.55 billion in January-June from US$1.63 billion in the same period last year, the London-headquartered bank said in a stock exchange filing.
The latest profit compared with the US$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 very happy 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 actually 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.”
StanChart’s profit boost was helped by improved loan impairments, and the bank was also able to release US$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 larger rival HSBC did a day earlier.
Income fell 5%, which the bank blamed on low interest rates that it said were now likely at their trough.
Costs rose 8%, 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.
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