Standard Chartered ((GB:STAN)) has held its Q1 earnings call. Read on for the main highlights of the call.
Standard Chartered’s recent earnings call highlighted a robust financial performance, marked by significant growth in income and wealth management. The sentiment was generally positive, with strong earnings and expansion in key areas. However, challenges such as net interest income decline and geopolitical uncertainties, particularly tariffs, pose potential risks to future performance.
Strong Income and Earnings Growth
Standard Chartered reported a remarkable 12% year-on-year increase in income, with earnings per share surging by 19%. This growth was primarily driven by strong performances in Wealth Solutions, Global Markets, and Global Banking, underscoring the company’s effective strategies in these sectors.
Continued Expansion in Wealth Management
The company’s Wealth Solutions segment saw a 28% increase in income, fueled by structured products and bancassurance. The acquisition of 72,000 new clients further highlights the success of their wealth management expansion efforts.
Resilient Network Business
The network business, accounting for 60% of Corporate and Institutional Banking (CIB) income, demonstrated resilience and diversification. With a network income of $7.3 billion in 2024, the business has achieved a 9% compound annual growth rate (CAGR) since 2019.
Strong Capital and RWA Management
Despite a $1.5 billion share buyback, Standard Chartered’s Common Equity Tier 1 (CET1) ratio increased by 21 basis points to 13.8%, reflecting robust capital and risk-weighted asset (RWA) management.
Challenges in Net Interest Income
Net interest income (NII) faced a 5% decline quarter-on-quarter, attributed to a strong Q4 performance, reclassification impacts, and a lower day count. The outlook for NII growth in 2025 remains challenging.
Credit Impairment and Stage 2 Asset Increases
Credit impairment reached $219 million, with a notable rise in Stage 2 assets due to downgrades in some corporate clients, indicating potential credit risk concerns.
Geopolitical and Tariff Uncertainties
The company faces uncertainties from ongoing geopolitical tensions and potential tariff impacts, which could affect future income, particularly the $900 million network income exposed to tariffs.
Forward-Looking Guidance
Looking ahead, Standard Chartered maintains a positive outlook for 2025 and 2026, despite external challenges. The first quarter of 2025 showed a strong financial performance with a 7% increase in operating income, or 12% excluding notable items from the previous year. The company remains focused on strategic growth initiatives, despite a 5% rise in operating expenses due to inflation.
In conclusion, Standard Chartered’s earnings call reflected a strong financial position with significant growth in key areas. While challenges such as net interest income decline and geopolitical uncertainties persist, the company’s strategic initiatives and robust capital management provide a solid foundation for future growth.