ii view: is Standard Chartered a buying opportunity?

Full-year results to 31 December

• Underlying operating income up 6% to $20.9 billion 
• Adjusted pre-tax profit up 18% to $7.9 billion
• Capital cushion, or CET1 ratio of 14.1%, down from 14.2% in late 2024
• Final dividend of 49 US cents per share
• Total 2025 dividend payment up 65% to 61 US cents per share
• Tangible net asset value up 12% to $17.30 per share
• Return on Tangible Equity (ROTE) of 14.7%, up from 11.7%

Guidance:

• Expects full year 2026 currency adjusted operating income growth towards the bottom end of a 5% to 7% range 
• Expects ROTE of more than 12%
• Planning a new share buyback of $1.5 billion 

Chief executive Bill Winters said:

"2025 was another year of strong momentum. We achieved an underlying return on tangible equity of 14.7%, exceeding our three-year plan a full year early. We have made a good start to the year and continue to benefit from a supportive business environment. 

“We are seeing robust growth in our larger markets, and structural shifts in global trade and investment play to our distinctive strengths serving our clients' cross-border and affluent banking needs.”

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ii round-up:

Headquartered in the UK, Standard Chartered operates across 50 plus countries, primarily in Asia, Africa, and the Middle East. 

The Corporate and Investment banking division, servicing company customers, generated 58% of operating income during this latest full year. 

The Wealth and Retailing division, helping personal or retail customers, accounted for a further 40% of income.

Finally, the Ventures division, funding innovative new financial business models through technology partnerships, generated most of the 2% balance.

For a round-up of these latest results announced on 24 February, please click here.

ii view:

Operating for more than 150 years, Standard Chartered today employs around 80,000 people. Geographically, Hong Kong generated most income in 2025 at just over a quarter. That was followed by Singapore at 16%, India 8%, and the USA, China and the United Arab Emirates (UAE) each at around 6%. The UK accounted for just over 4%. 

Management continues to expect client activity to be shaped by structural shifts in the global economy including a more multi-aligned world, the increasing digitisation of money, and rising wealth participation across markets. 

For investors, a war in the Middle East and the bank’s exposure to the UAE as well as other interests in Qatar and Saudi Arabia now offers heightened loan default risk. The wider impacts of the war including soaring fuel costs and rising inflation may now slow global economic activity more widely, denting demand for borrowing. Other geopolitical risks include exposure to Hong Kong and China given ongoing Western concerns about Taiwan, while a forecast price/earnings (PE) ratio above the three-year average may suggest the shares are not obviously cheap.  

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On the upside, a diversity of geographical regions and business types exist including exposure to investment banking which is an area that many UK headquartered peers exited following the 2008 financial crisis. Management’s focus on improved efficiency has seen key performance indicators such as cost:income and ROTE moving in the right direction. Exposure to growing Asian wealth was evidenced by net new money of $52 billion via 275,000 new retail clients, while a capital cushion, or CET1 ratio of 14.1% is better than the group’s targeted range of 13-14%, pointing to a robust balance sheet.

For now, uncertainty around the outlook caused by events in the Middle East will likely keep more cautious investors sidelined. That said, a consensus analyst estimate of fair value above £18.50 per share plus a forecast dividend yield of just over 3%, continue to offer grounds for long-term optimism. 

Positives: 

• Both business type and geographical diversity
• Previous takeover approach

Negatives:

• Concerns for China’s economic growth
• Global geopolitical tensions

The average rating of stock market analysts:

Strong hold