Standard Chartered Reports Lower Profits Amid Dividend Increase

Standard Chartered sees a decline in profits despite rising operating income. The bank forecasts a solid outlook with higher dividends and a significant share buyback. Investors should note the weak performance in net interest income that may influence stock prices.

Date: 21-02-2025

AI Rating: 5

Earnings Per Share (EPS): The earnings per share for Standard Chartered fell 41% to 20.2 US cents from 34.0 US cents a year ago. This significant drop is concerning as it indicates weakened profitability, which could negatively affect investor sentiment.

Profit Margins: The profit before taxation decreased by 30% to $800 million compared to last year's $1.14 billion. The substantial decline in profit suggests challenges in maintaining profit margins, particularly in the face of lower net interest income.

Revenue Growth: Despite the challenges, total operating income grew by 10% to $4.80 billion from $4.37 billion last year. This growth, along with a projected CAGR of 5-7% in operating income for 2023-2026, indicates potential for recovery and expansion, although the company expects slower growth in 2025.

Net Income: The bank's underlying profit before tax was $1.047 billion, nearly stable with last year's $1.06 billion. This stability in underlying profit suggests resilience despite the challenges faced in profit before taxation.

Free Cash Flow (FCF): While the report does not explicitly mention Free Cash Flow, the decision to initiate a $1.5 billion share buyback could imply sufficient underlying cash flow generation to support such initiatives.

Return on Equity (ROE): There is no specific mention of Return on Equity in the text. However, the decline in profits and challenges in net interest income may impact the overall effectiveness and attractiveness of equity as an investment.

Stocks: STAN.L