ii view: Standard Chartered ups the dividend

Standard Chartered grows profits and ups the dividend, but the US China trade dispute overshadows. 

First-half results to 30 June 2019

• Operating income up 1% to $7.7 billion
• Adjusted pre-tax profit up 11% to $2.6 billion
• Operating expenses down 3% to $5 billion down 3%
• Interim dividend up 17% to 7 cents per share

Chief executive Bill Winters said:

"We made good progress both financially and on our strategic priorities in the first half, growing income 4% and improving profits 13%, at constant currency. We have positioned ourselves to develop and scale innovative new business models, as we support and grow with our clients. We are investing now to create optionality for the future, and I am excited by the opportunities we are already generating."

ii round-up:

Headquartered in the UK, Standard Chartered (LSE:STAN) operates across 60 countries, primarily in Asia, Africa, and the Middle East. 

Standard is listed on the London and Hong Kong Stock Exchanges as well as the Bombay and National Stock Exchanges in India. 

In February, management outlined refreshed strategic priorities including streamlining operations, embracing digitisation and investing to accelerate growth. 

The bank reported encouraging progress in these half year results. Profit growth materialised at the upper end of analyst forecasts with higher than expected cost reduction a major contributor. 

Accompanying outlook comments proved mixed, highlighting both its geographical exposure to favourable growth markets, although also underlining uncertainty given the ongoing US China trade dispute.  

The share price rose by over 3% in mid-morning UK stock market trading. 

ii view:

Exposure to Asia and the emerging markets saw Standard Chartered missing the very worst of the ravages from the financial crisis. But the bank has most certainly had its problems. Like rivals, moves to simplify and refocus the bank have been and are still being pursued. Full year 2018 results saw management outlining refreshed actions and priorities. 

For investors, near term, its exposure to the US dollar and currencies tracking it, combined with US interest rate policy and its impact on net interest margins may overshadow. Looking beyond, progress under its refreshed priorities will now be watched, with a focus on shareholder returns important to both management and investors alike. 

Positives: 

• Pursuing refreshed strategic priorities
• Shareholder returns are a focus – interim dividend up 17%

Negatives:

• Exposure to the politically troubled Hong Kong
• Outlook comments highlighted uncertainty and the US China trade dispute

The average rating of stock market analysts:

Hold