Standard Chartered share price up 2%, Indonesian bank sale to fund share buyback

Standard Chartered recorded a 28% increase in pre-tax profits of $3.86 billion in its full-year 2018 results, but despite the strong showing its performance came in below analysts’ expectations due to rising US-China trade tensions late last year.

A Bloomberg-compiled consensus of analysts’ forecasts estimated that the emerging markets bank that focuses on Asian, Africa and Middle-Eastern would end the year with profits of $3.98 billion.

‘While the year started strongly with good momentum across all businesses, client sentiment in our markets dipped later in the year, coming under pressure from geopolitical uncertainties, the rapid escalation of trade tensions between the US and China, as well as slower growth in the global economy,’ Standard Chartered Group CEO Bill Winters said.

Standard Chartered share price climbs higher after unveiling share buyback scheme

Shares in the bank increased by 2.7% to HK$64.70 on Tuesday morning, after the company said it was looking at selling its stake in an Indonesian bank to finance a share buyback scheme.

‘We have made tremendous progress securing the foundations of the business since 2015, resulting in a third successive year of underlying profit growth,’ Winters added.

‘Our refreshed priorities announced today will help realise the true value of the franchise.’

Standard Chartered: key figures

The bank saw a significant improvement in its overall profitability, driven by higher quality income growth with cost and asset origination, with the lender seeing its operating income grow 5% to $15 billion in 2018.

The lender also made good on cost-saving strategy, with the bank delivering $3.2 billion in gross cost efficiencies, exceeding the target it set back in November 2015.

Basic earnings per share increased by 14.2 cents to 61.4 cents a share, with the bank’s management recommending a final dividend of 15 cents a share, up 36% from 11 cents allocated a year prior.